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Court Of Chancery Expands MFW To Recapitalization

Posted In Fiduciary Duty

IRA Trust FBO Bobbie Ahmed v. Crane, C.A.. 12742-CB (December 11, 2017)

This is an important decision because it extends the holding of MFW to a stock reclassification. Under the 6-part test of MFW, the business judgment standard of review applied and the complaint was dismissed. The opinion is particularly useful for its historical review of how the decisional law has evolved to cover many different types of transactions with a controller and when, but for the protections for stockholders provided by MFW, the intrinsic fairness test would have applied to the Court’s analysis.

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