In Corwin v. KKR Financial Holdings, 125 A.3d 304 (Del. 2015), the Delaware Supreme Court held that the business judgment rule applies to any merger not subject to entire fairness review that has been approved by a fully informed, uncoerced vote of disinterested stockholders. Following that decision, the Delaware Court of Chancery has applied Corwin to a variety of M&A transactions, and practitioners have wrestled with the impact of the landmark ruling on stockholder litigation in Delaware.
On Feb. 9, the Delaware Supreme Court issued a one-page order (In re Volcano Stockholder Litigation, No. 372, 2016 (Del. Feb. 9, 2017)), affirming the Court of Chancery’s holding in one of the earlier post-Corwin decisions, In re Volcano Stockholder Litigation, 143 A.3d 727 (Del. Ch. 2016). Although the Supreme Court did not use the order to express any new or additional views on Corwin, the fact that the order endorsed the underlying reasoning in Volcano without comment still provides much-needed guidance to Delaware corporations and practitioners.
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