The Delaware Supreme Court held in Corwin v. KKR Financial Holdings, that “when a transaction not subject to the entire fairness standard is approved by a fully-informed, uncoerced vote of the disinterested stockholders, the business judgment rule applies,” even when a stockholder vote is statutorily required and the transaction is otherwise subject to the Revlon, 125 A.3d 304, 308-09 (Del. 2015),standard of review.
Subsequently, on May 6, the Delaware Supreme Court clarified in Singh v. Attenborough, that the business judgment rule applies irrebuttably to review of a transaction approved by a vote of the majority of the outstanding, fully-informed, uncoerced, disinterested stockholders. Therefore, in Attenborough, the Supreme Court concluded that this standard of review insulates the transaction from challenge, except on the ground of waste—which typically results in dismissal because stockholders are unlikely to approve a “wasteful” transaction where directors are irrationally squandering or giving away corporate assets.
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