On July 13, in Teamsters Union 25 Health Services & Insurance Plan v. Baiera, C.A. No. 9503-CB (Del. Ch. July 13, 2015), the Delaware Court of Chancery confirmed that, under Delaware law, members of corporate boards of directors may defeat, at the pleading stage, derivative breach of fiduciary duty claims even where the challenged transaction is between the corporation and its controlling stockholder, and is subject to entire fairness review.
Background
In Baiera, Orbitz Worldwide Inc. entered into a multiyear services agreement (referred to in the opinion as the “new agreement”) with Travelport, Orbitz’s alleged controlling stockholder, under which Travelport was to provide Orbitz with global distribution systems services. Because the new agreement was entered into between Orbitz and its alleged controlling stockholder, Travelport, the transaction constituted a “related party” transaction and was subject to review and approval by Orbitz’s audit committee. Orbitz’s audit committee approved the new agreement Jan. 29, 2014, and Orbitz entered into the new agreement with Travelport on Feb. 4, 2014.
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