Albert Manwaring IV. Controlling Stockholder Transactions That Do Not Involve a Freeze-Out Merger May Satisfy MFW to Obtain Business Judgment Review
Since MFW, the Court of Chancery has applied the MFW framework to assess the standard of review of controlling stockholder transactions that did not involve a freeze-out merger, which commentators have referred to as "MFW creep."
July 24, 2024 at 09:01 AM
5 minute read
In Kahn v. M&F Worldwide, 88 A.3d 635 (Del. 2014) (MFW), the Delaware Supreme Court ruled that a controlling stockholder transaction involving a freeze-out merger, which is structured to include approval by a well-functioning independent special committee and the affirmative vote of the majority of the fully-informed and uncoerced minority stockholders, is subject to the business judgment standard of review. Since MFW, the Court of Chancery has applied the MFW framework to assess the standard of review of controlling stockholder transactions that did not involve a freeze-out merger, which commentators have referred to as "MFW creep."
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