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Delaware Supreme Court Applies Business Judgment Review to Controlling Stockholder Mergers Using Dual Protection Structure
14 March 2014
Delaware Supreme Court affirms application of business judgment rule to controlling stockholder mergers that from inception are subject to both (i) the approval of a committee of independent directors with the power to hire its own advisors and to say no and (ii) the non-waivable vote of a majority of the unaffiliated shares.
Entire fairness test will apply if those conditions are not present, if the special committee does not meet its duty of care in negotiating a fair price, if the unaffiliated stockholder vote is not fully informed, or if there is evidence of coercion.
Mergers & Acquisitions
Gregory V. Gooding
Gary W. Kubek
William D. Regner
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