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Delaware Corporate Law Bulletins Category

Chancery Court Refuses To Dismiss Aiding and Abetting Claim Against Target Company Financial Advisor, but Grants Dismissal to Outside Counsel and Buyer

Sep. 6, 2021—Robert S. Reder & Katherine H. Monks | 74 Vand. L. Rev. En Banc 445 (2021) | In a search for deep-pocketed defendants in M&A-related stockholder litigation, plaintiffs often add aiding and abetting claims against financial advisors, outside counsel, and buyers to the underlying breach of fiduciary duty claims. Consider, for example, RBC Cap. Mkts.,...

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Neutralizing the “800-[P]ound [G]orilla”: Chancery Court Denies Motions To Dismiss Breach of Fiduciary Duty Claims Against Controlling Stockholder Engaged in Conflicted Transaction and Special Committee Members

Sep. 2, 2021—Robert S. Reder & Lisa Orucevic | 74 Vand. L. Rev. En Banc 431 (2021) | The Delaware Court of Chancery (“Chancery Court”) generally is suspicious of a transaction involving a corporation and its controlling stockholder “where the controller indisputably stands on both sides” (quoting Viacom Litigation here and throughout the piece unless otherwise noted)....

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Pleading-Stage Dismissal via Corwin Denied to 34.8% Stockholder Alleged To Control Both Sides of Challenged Transaction

Sep. 2, 2021—Robert S. Reder & John K. Neal, Jr. | 74 Vand. L. Rev. En Banc 419 (2021) | Under the Delaware Supreme Court’s landmark ruling in Corwin v. KKR Fin. Holdings LLC, 125 A.3d 304 (Del. 2015) (“Corwin”), a transaction “approved by a fully informed, uncoerced vote of the disinterested stockholders” will attract business judgment...

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Chancery Court Again Refuses Preliminary Dismissal due to Well-Pled Allegations that Sale Process Orchestrated by Target Company Fiduciary Failed To Satisfy Revlon Standards

Sep. 1, 2021—Robert S. Reder & Victoria D. Selover | 74 Vand. L. Rev. En Banc 407 (2021) | Several recent decisions of the Delaware Court of Chancery (“Chancery Court”) have considered the interplay between two iconic Delaware Supreme Court decisions rendered in the corporate sale context: Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d...

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MFW’s Ab Initio Requirement Not Satisfied When Controlling Stockholder Negotiated with Minority Stockholder Before Acceding to “[D]ual [P]rotections”

Aug. 31, 2021—Robert S. Reder & Connor J. Breed | 74 Vand. L. Rev. En Banc 397 (2021) | In In re HomeFed Corp. S’holder Litig., No. 2019-0592-AGB, 2020 Del. Ch. LEXIS 235 (Del. Ch. July 13, 2020) (“HomeFed”), the Delaware Court of Chancery (“Chancery Court”) denied pleading-stage dismissal of claims challenging a controlling stockholder-led buyout. In...

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Chancery Court Determines that Merger Partner Breached “Efforts Covenants” in Connection with “[S]tar-[C]rossed” Combination of Health Insurance Giants

Aug. 28, 2021—Robert S. Reder & Connor J. Breed | 74 Vand. L. Rev. En Banc 383 (2021) | Amid a flurry of industry consolidations, Anthem, Inc. (“Anthem”) and Cigna Corporation (“Cigna”), the second and third largest health insurers in the United States, entered into an Agreement and Plan of Merger dated July 23, 2015 (“Merger Agreement”)....

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Chancery Court Takes a Deep Dive into Imprecise Asset Purchase Agreement Language

Aug. 27, 2021—Robert S. Reder & Gabrielle M. Haddad | 74 Vand. L. Rev. En Banc 375 (2021) | Precise language and adherence to market conventions are crucial elements when negotiating and drafting commercial agreements. In Dermatology Assocs. of San Antonio v. Oliver St. Dermatology Mgmt. LLC, No. 2017-0665-KSJM, 2020 WL 4581674 (Del. Ch. Aug. 10, 2020),...

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Purchase Agreement’s Failure To Toll Running of Survival Period Dooms Indemnification Claims Despite Buyer’s Timely Claim Notice

Aug. 27, 2021—Robert S. Reder & John H. Gibbons | 74 Vand. L. Rev. En Banc 367 (2021) | In the context of contracts governing merger and acquisition (“M&A”) transactions, survival clauses specify the period of time after closing during which the buyer may claim indemnification from the seller for losses caused by various breaches of the...

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Chancery Court Considers Whether Either Party to Failed Multibillion Dollar Merger Was Entitled to Payment of a Fixed Termination Fee

Aug. 11, 2021—Robert S. Reder & Maryam Saad | 74 Vand. L. Rev. En Banc 263 (2021) | The Williams Companies, Inc. (“Williams”) and Energy Transfer L.P. (“ETE”) are “significant players in the energy pipeline business” (quoting Williams II below). On September 28, 2015, Williams and ETE agreed to a complicated “multi-billion-dollar merger” (quoting Williams II below)...

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Stillwater Appraisal: Delaware Supreme Court Affirms Chancery Court Reliance on Deal Price in Determining “Fair Value”

Aug. 11, 2021—Robert S. Reder & Chutian Wang | 74 Vand. L. Rev. En Banc 253 (2021) | Under Section 262 of the Delaware General Corporation Law (“DGCL § 262”), a stockholder unhappy with the consideration payable in a merger is entitled to dissent from the transaction and seek a Delaware Court of Chancery (“Chancery Court”) appraisal...

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Jarden Appraisal: Delaware Supreme Court Affirms Chancery Court’s Exclusive Reliance on Unaffected Market Price in Determining “Fair Value” Under DGCL § 262

Aug. 11, 2021—Robert S. Reder & James H. Ryan | 74 Vand. L. Rev. En Banc 241 (2021) | For (at least) the fourth time since 2017, the Delaware Supreme Court (“Supreme Court”) has weighed in on the proper analysis for determining “fair value” in an appraisal proceeding under Delaware General Corporation Law § 262 (“DGCL §...

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Chancery Court Employs Context-Driven Analysis in Adopting Nuanced Interpretations of DGCL Provisions

Apr. 29, 2021—Robert S. Reder | 74 Vand. L. Rev. En Banc 85 (2021) | In Stream TV, Vice Chancellor Laster addressed aspects of the DGCL which previously had received scant attention in the Delaware courts. Employing a context-driven approach to statutory interpretation, the Vice Chancellor arrived at nuanced explanations of two provisions of the DGCL whose...

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No Corwin, No Problem: Chancery Court Discusses Revlon’s Role in Analyzing Post-Closing Damages Claims Against Target Company Directors

Mar. 12, 2021—Robert S. Reder & Spencer H. Lutz | 74 Vand. L. Rev. En Banc 71 (2021) | The Vice Chancellor’s opinion offers perhaps the clearest explanation to date of how damages claims asserting breach of so-called “Revlon duties” will be analyzed post-Corwin. As Corwin instructs, “Revlon ‘duties’ should not be confused with the Revlon standard...

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Chancery Court Denies Pleading-Stage Dismissal Under Corwin due to Presence of Control Group

Mar. 12, 2021—Robert S. Reder & Robert W. Dillard | 74 Vand. L. Rev. En Banc 61 (2021) | Garfield further limits the reach of Corwin: even if all the elements are met, the presence of a “control group” realizing benefits from a transaction not shared with other stockholders negates the availability of Corwin. In light of...

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Failure to Satisfy Four Prongs of MFW Framework Dooms Pleading-Stage Dismissal of Claims Arising from Controlling Stockholder-Led Redemption of Minority Shares

Mar. 12, 2021—Robert S. Reder & Kirby W. Ammons | 74 Vand. L. Rev. En Banc 47 (2021) | Dell Technologies offers significant guidance to dealmakers and their legal counsel for structuring commercial transactions involving controlling stockholders. Vice Chancellor Laster’s comprehensive opinion demonstrates that simply paying lip service to the “six necessary and sufficient conditions for obtaining...

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Chancery Court Questions Whether Nominally Designated “Independent” Directors Satisfied Requirements of Stockholders Agreement

Mar. 12, 2021—Robert S. Reder & Eunice (Chan Mi) Lim | 74 Vand. L. Rev. En Banc 37 (2021) | Chancellor Bouchard’s blanket rejection of the Coty Stockholder Litigation defendants’ motions to dismiss demonstrates the Chancery Court’s refusal blindly to accept procedural safeguards purportedly put in place to protect minority stockholders. Instead, in the face of well-pled...

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