Recently in Ayers v. Foley, the Delaware Court of Chancery issued an opinion (by Vice Chancellor Will) interpreting for the first time certain provisions in the 2025 amendments to Section 144 of the Delaware General Corporation Law (“DGCL”), the landmark statutory reforms that provide safe harbor protections for certain conflicted transactions. The practical takeaway of Ayers is that Section 144 has raised the bar materially for rebutting the presumption of director independence at the pleading stage for publicly listed corporations when the board has determined that a director satisfies the exchange’s independence requirements because of the statute’s “substantial and particularized facts” pleading requirement. Significantly, the court reached this conclusion in the context of determining the issue of demand futility, reasoning that the heightened pleading standard in Section 144 is not confined to the safe harbors in Section 144 and was intended to apply broadly to other contexts as well. Ayers also reaffirms that when directors approve their own compensation, they are necessarily interested and their actions continue to be subject to entire fairness review.

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