Determining the Likely Standard of Review in Delaware M&A Transactions

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2017-04-29

Posted by Robert B. Little & Joseph A. Orien, Gibson, Dunn & Crutcher LLP, on Friday, April 28, 2017
Editor's Note: Robert B. Little is a partner and Joseph A. Orien is an associate at Gibson, Dunn & Crutcher LLP. This post is based on a Gibson Dunn publication by Mr. Little and Mr. Orien, and is part of the Delaware law series; links to other posts in the series are available here.

M&A practitioners are well aware of the several standards of review applied by Delaware courts in evaluating whether directors have complied with their fiduciary duties in the context of M&A transactions. Because the standard applied will often have a significant effect on the outcome of such evaluation, establishing processes to secure a more favorable standard of review is a significant part of Delaware M&A practice. The chart below identifies fact patterns common to Delaware M&A and provides a preliminary assessment of the likely standard of review applicable to transactions fitting such fact patterns. However, because the Delaware courts evaluate each transaction in light of the transaction’s particular set of facts and circumstances, and due to the evolving nature of the law in this area, this chart should not be treated as a definitive statement of the standard of review applicable to any particular transaction. [1]

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