The Court of Chancery recently issued a ruling in In re Cox Communications Inc. Shareholders Litigation, C.A. No. 613-N Strine, V.C. (Del.Ch., June 6, 2005) which indicated that it may be time to revisit the standards governing going-private transactions. Through dicta, the Court expressed its views that the standards in Kahn v. Lynch Communication Systems, Inc., 638 A.2d 1110 (Del. 1994) should be altered to invoke the business judgment rule when the deal includes the procedural protections "mirrored" in arms-length mergers under Section 251.
Amy A. Quinlan, a member of Morris James' Business Litigation, Corporate and Fiduciary Litigation and Intellectual Property Litigation Groups, has prepared the attached article which provides further details on this current shift in Delaware law.