That’s my take too. It’s like the Court said—people think Delaware is too tough on controllers? Maybe they will leave us for Nevada? Ha! We will make it even tougher!!

Fin.

The Court had a chance to ease up on Delaware fiduciaries and possibly put a lot of that chatter to rest. Instead, it doubled down on MFW and even went one step further with its clarification that the committee has to be FULLY independent in order to get the benefit of the business judgment rule.

On the other hand, there's been a lot of chatter about whether Delaware companies should decamp to "friendlier" jurisdictions like Nevada, which has eliminated entire fairness review altogether.

They could have argued for a change in the law. Instead, they engaged in revisionist history and argued that the law already mandated their proffered result. It's not surprising that the Delaware Supreme Court wasn't fooled.

The decision was both surprising and not surprising.

On the one hand, I give the defendants' counsel immense credit for a creative argument, but I didn't agree with their interpretation of the relevant precedents.

The Court also went one step further and clarified that the special committee has to be COMPLETELY independent; a majority of independent directors is not good enough.

But MFW was a squeeze-out case, and the defendants argued that just one of these protections is sufficient to obtain BJR review outside of the squeeze-out context. The Court rejected this argument and held that both MFW protections are required to get BJR in all conflicted controller transactions.

Under MFW, defendants could shift the standard of review from entire fairness to business judgment if they obtained approval of BOTH (i) an independent special committee, and (ii) a majority of the minority stockholders.

Excellent—but was it really quick?

What a nice poem though. I had this assignment too. I couldn’t pick a poem so a friend, a little bit of a rebel, told me to do People are Strange. So I did.

Absolutely unreal