Morris Nichols Memorandum on Direct Claims Challenging Controlling-Shareholder Transactions

This post is by A. Gilchrist Sparks of Morris, Nichols, Arsht & Tunnell LLP. This post is part of the Delaware law series, which is cosponsored by the Forum and Corporation Service Company; links to other posts in the series are available here.

My colleagues R. Judson Scaggs, William Lafferty, and Jeffrey Wolters of Morris, Nichols, Arsht & Tunnell have prepared this highly insightful memorandum on the Delaware Supreme Court‘s recent en banc decision in Gatz v. Ponsoldt, which held that shareholders may bring direct (as well as derivative) claims to challenge transactions orchestrated by a controlling shareholder.

The memo is a must-read for corporate counsel and directors of firms with controlling shareholders, who are increasingly subject to direct claims for violations of their fiduciary obligations to minority shareholders.

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