Barbara Borden and Sarah Lightdale are Partners at Cooley LLP. This post is based on a Cooley memorandum by Ms. Borden, Ms. Lightdale, Brian French and Jenna Miller, and is part of the Delaware law series; links to other posts in the series are available here.
The mergers & acquisitions market may wax and wane, but one thing in M&A is consistent from year to year: The Delaware courts issue opinions that impact M&A dealmaking. And this year is certainly no exception – Delaware courts continue to have plenty to say about M&A. While certainly not exhaustive (we were serious – the courts have been busy!), in this post we have summarized key takeaways from recent cases.
No Corwin for post-closing claims for injunctive relief
In In re Edgio, Inc. Stockholders Litigation(Del. Ch.; 5/23), the Delaware Court of Chancery issued a ruling regarding an unsettled question of Delaware corporate law – whether an uncoerced and fully informed vote of disinterested stockholders may ratify and defeat a post-closing claim seeking to enjoin certain governance measures and alleged entrenchment devices for the combined company negotiated as part of a transaction. The short answer: no. The longer answer: The court concluded that such a vote, often called “Corwin cleansing,” does not apply to post-closing claims for injunctive relief.
