Kahn v. M&F Worldwide Corp.: Delaware Supreme Court Sets Criteria for Applying Business Judgment Rule to Controlling Stockholder Going-Private Transactions
March 18, 2014
On March 14, 2014, in Kahn v. M&F Worldwide Corp., the Delaware Supreme Court held that the deferential business judgment standard of review should apply to a going-private merger between a controlling stockholder and its corporate subsidiary where the transaction is conditioned upon approval from both an independent special committee and an informed, uncoerced vote of a majority of the minority stockholders. Kahn presented a question of first impression for the Delaware Supreme Court and gave the court an opportunity to articulate clear guidelines for how a controlling stockholder that takes a company private can avoid a rigorous entire fairness review.
