Cliff C. Gardner of Skadden, Arps, Slate, Meagher and Flom. Courtesy photo

Introduction

In Corwin v. KKR Financial Holdings, the Delaware Supreme Court held that a fully informed, uncoerced vote of the disinterested stockholders invokes the outcome-determinative business judgment rule standard of review for post-closing claims for money damages that would otherwise be subject to Revlon scrutiny. Put another way, such a vote may effectively cleanse certain fiduciary duty violations arising from merger activities. Recently, in In re Edgio Stockholders Litigation, the Chancery Court was asked to apply the same cleansing effect to a claim for injunctive relief analyzed under Unocal, but Vice Chancellor Morgan Zurn found that Corwin was inapplicable.