Philip Richter is a partner and Co-Head of the Mergers & Acquisitions Practice and Warren S. de Wied is partner and member of the Mergers & Acquisitions Practice at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank publication by Mr. Richter, Mr. de Wied, Scott B. Luftglass, Abigail Pickering Bomba, Philip Richter, Robert C. Schwenkel, and Gail Weinstein. This post is part of the Delaware law series; links to other posts in the series are available here.
Both Miami v. Comstock (Aug. 24, 2016) and Larkin v. Shah (Aug. 25, 2016) reflect the evolution of recent Delaware jurisprudence toward affording significantly greater deference to directors’ and stockholders’ decisions in non-controller transactions. In both cases, the Delaware Court of Chancery dismissed the plaintiffs’ post-closing actions for damages that were based on claims of breaches of fiduciary duties by the target board in connection with a public company merger. The court found, in each case, that the stockholder vote approving the merger was fully informed; found that the transaction did not involve a controller; applying the Delaware Supreme Court’s seminal 2015 Corwin decision, evaluated the claims under the business judgment rule standard of review; and dismissed the claims at the early pleading stage of litigation.
