Gail Weinstein is senior counsel and Philip Richter is a partner at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank publication by Ms. Weinstein, Mr. Richter, Steven Epstein, Warren S. de Wied, Christopher Ewan, and Brian T. Mangino. This post is part of the Delaware law series; links to other posts in the series are available here.
As has been widely discussed over the past two years, the Delaware courts have moved toward substantially greater deference to board and stockholder decisions in M&A transactions. Other than in the case of transactions with controllers, there is significantly less risk today than in the past that a challenge (particularly post-closing) to a board decision to engage in a transaction will be successful; there is a far greater likelihood that litigation challenging a transaction will be dismissed at an early stage of litigation; and when there has been a pre-signing market check, there is considerably less risk that an appraisal award issued to dissenting shareholders will exceed the merger price.