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Abstract: 

In March 2018, the Delaware Court of Chancery decided a trio of cases in which the court further refined the standard in Delaware for determining when a minority stockholder should be considered a controlling stockholder for purposes of subjecting a self-interested transaction to entire fairness review. In this article, the authors review notable precedent with respect to reviewing controlling stockholder transactions, analyze the three cases, and provide practice tips for stockholders and corporations in light of the court’s updated guidance on de facto controlling stockholders.

Keywords: Delaware Court of Chancery; Kahn v. M&F Worldwide Corp; In re Rouse Properties, Inc., Fiduciary Litigation; In re Oracle Corporate Derivative Litigation; In re Tesla Motors, Inc. S’holder Litig.

Affiliations:  1: Sullivan & Cromwell LLP; 2: Sullivan & Cromwell LLP.