Applying the Business Judgment Rule, Rather than Entire Fairness, in Going-Private Transaction with Controlling Stockholders

摘要

At the time of this summary, the court's decision has been appealed to the Delaware Supreme Court. If the decision is affirmed, controlling stockholders and boards of directors of corporations with controlling stockholders will have a clear pathway to ensuring that a going-private transaction with the controlling stockholder will be subject to the business judgment rule standard of review, rather than the stringent entire fairness standard and the uncertainty that always accompanies application of that standard, provided the controlling stockholder is willing to subject the transaction to the independent approval of both a special committee of independent directors and the majority of the minority stockholders.