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Delaware Corporate Law Bulletins Category

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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Chancery Court Again Rejects Motion by Large Minority Blockholder to Dismiss Fiduciary Breach Claims Under Corwin

Feb. 5, 2021—Robert S. Reder & G. Parker Kolodka | 74 Vand. L. Rev. En Banc 25 (2021) | Vice Chancellor Slights’s extension of the inherent coercion doctrine to the summary judgment phase in Tesla II demonstrates the risks faced by dealmakers who hope to rely on a Corwin defense when a potential controlling stockholder is in...

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Chancery Court—Reiterating High Bar for Proving “MAE”—Requires Buyer to Honor Its Obligations Under Acquisition Agreement

Feb. 5, 2021—Robert S. Reder & Bailey R. Vincent | 74 Vand. L. Rev. En Banc 13 (2021) | Akorn, rather than straying from Chancery Court precedent, reiterated that the occurrence of a circumstance worthy of an MAE is rare. In Channel Medsystems, Channel’s ability ultimately to win FDA approval of the Product, coupled with BSC’s suspect...

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Chancery Court Dismisses Revlon Claims Without Considering Directors’ Potential Corwin Defense

Jan. 25, 2021—Robert S. Reder & Anna Choi | 74 Vand. L. Rev. En Banc 1 (2021) | Essendant reinforces the heightened pleading standard a stockholder-plaintiff must overcome to survive a motion to dismiss its claims of directorial breach of fiduciary duty in the Revlon context. Absent well-pled facts challenging a board’s independence, disinterestedness, or good faith...

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Chancery Court Refuses to Alter Contractual Allocation of Risk Between Sophisticated Parties

Dec. 30, 2020—Robert S. Reder & Marissa L. Barbalato | 73 Vand. L. Rev. En Banc 275 (2020) |  In her opinion, Vice Chancellor Zurn instructed that Julius v. Accurus “teaches an important lesson about the benefits of allocating risk among contracting parties and detriments of imprecise drafting.” In essence, the Buyers were in search of a...

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Despite Lack of Control Stockholder, Chancery Court Applies M&F’s “Ab Initio” Requirement in Determining Whether Independent Committee Recommendation Cleansed Transaction Approved by Conflicted Board

Dec. 30, 2020—Robert S. Reder & Colton Tyler Haney | 73 Vand. L. Rev. En Banc 265 (2020) | Salladay discusses the options available to corporate dealmakers and their legal counsel to obtain business judgment review—and ultimately pleading-stage dismissal—of conflicted transactions. If a controlling stockholder is to receive benefits from the transaction not shared with the other...

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