Delaware courts have recently weighed in on three of the hottest issues in deal law: the standard of review governing controlling-stockholder buyouts, the power of stockholder approval to preclude fiduciary litigation challenging a completed merger, and the law governing merger disclosure documents. The decisions push merger planners toward greater public disclosure before any stockholder vote on a proposed transaction.
Ending years of uncertainty, the Delaware Supreme Court’s 2014 decision in In re MFW Worldwide held that a going-private transaction — a deal in which a controlling stockholder buys out minority stockholders — will be subject to the deferential business-judgment rule, so long as it was conditioned on the approval of both a committee of independent directors and a majority-of-the-minority stockholder vote.
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