Delaware Supreme Court Building Equitable Review in the Delaware Court of Chancery: Revisiting 'Schnell,' 'Blasius' and the Court's Role as Equitable Gatekeeper To Protect the Stockholder Franchise
A string of recent Delaware decisions have reaffirmed the critical role the Delaware courts play in ensuring that corporate transactions are "twice-tested"—for both legal validity and equitable fairness. These holdings affirm that the demanding standards set forth in 'Schnell' and 'Blasius' are alive and well, particularly when it comes to director actions that burden or interfere with the stockholder franchise.
October 13, 2022 at 10:00 AM
8 minute read
Corporate Governance
Delaware law has long held that "inequitable action does not become permissible simply because it is legally possible." And, when stockholder voting rights are implicated, even good faith actions by a board will not be upheld absent a "compelling justification." These holdings arose from Delaware's seminal decisions in Schnell v. Chris-Craft Industries, 285 A.2d 437 (Del. 1971), and Blasius v. Atlas Industries, 564 A.2d 651 (Del. Ch. 1988).
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