Minority Stockholder Was Not a Controller Because Plaintiff Did Not Adequately Plead Actual Control of the Company's Business Affairs
The actual control theory is "not easy to satisfy." In its recent decision, Scianella v. AstraZeneca UK Limited, C.A. No. 2023-0125-PAF (Del. Ch. July 8, 2024), the Delaware Court of Chancery emphasized that plaintiffs have a steep burden even at the pleadings stage to demonstrate actual control.
August 21, 2024 at 09:00 AM
5 minute read
ContributorsIt is axiomatic that directors and officers of a Delaware corporation owe fiduciary duties to stockholders (and the company). Controlling stockholders also owe fiduciary duties. A stockholder is deemed a controller either through ownership of 50-plus% of a company's voting power, or through actual control over its business affairs. Actual control means the stockholder has general control of a company's business affairs, or specific control of a transaction.
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