Delaware Court of Chancery Applies Irrebuttable Business Judgment Rule to a Section 251(h) Merger
July 8, 2016
On July 8, 2016, the firm published an alert titled “Delaware Court of Chancery Applies Irrebuttable Business Judgment Rule to a Section 251(h) Merger.”
On June 30, 2016, the Delaware Court of Chancery extended the Delaware Supreme Court’s recent holding in Singh v. Attenborough to find that the business judgment rule irrebuttably applies to judicial review of a two-step merger under Section 251(h) after a majority of fully informed, uncoerced, disinterested stockholders tender their shares. In In re Volcano Corporation Stockholder Litigation, the Chancery Court rejected the plaintiffs’ argument that the Recommendation Statement for the tender offer inadequately disclosed an alleged conflict of interest on the part of the target’s financial advisor and dismissed all claims against the target’s directors for breach of fiduciary duty and all claims against the target’s financial advisor for aiding and abetting that breach after finding that the claims were extinguished by the tender.