Yearly Archives: 2018

Delaware courts have recently issued decisions that have fundamentally altered corporate governance litigation. In 2016, the Court of Chancery changed the landscape for resolution of class actions on the basis of “disclosure-only” settlements, i.e., settlements without any monetary payment to the class. In In re Trulia, Inc. Stockholder Litig., the Court of Chancery refused to approve such a settlement to the extent it provided a class-wide release unless the supplemental disclosure was “plainly material.” In 2015, the Delaware Supreme Court held in Corwin v. KKR Fin. Holdings LLC that a transaction otherwise subject to Revlon review instead would be analyzed under the deferential business judgment rule if the transaction was approved by a majority of fully informed, uncoerced, disinterested stockholders. Confirming the far-reaching implications of Corwin, in Singh v. Attenborough, the Delaware Supreme Court held that “dismissal is typically the result” following Corwin‘s standard shifting, suggesting that the presumption is virtually irrefutable in that it can only be overcome by a showing of waste. The cumulative effect of these decisions has been to discourage pre-closing deal litigation (by making disclosure-based settlement much more difficult) and post-closing deal litigation (by making dismissal a near certainty where the procedural protections articulated in Corwin are in place).

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