Delaware Supreme Court Upholds The M&F W Case
Kahn v M&F Worldwide Corp., C.A. 334, 2013 (March 14, 2014)
The Delaware Supreme Court has upheld the important Court of Chancery decision in the M&F Worldwide case that applied the business judgment standard of review to a merger that has the following conditions: (1) the controlling stockholder conditions the merger on the approval of both a special committee and a majority of the minority stockholders, (2) the special committee is independent, (3) the special committee is empowered to freely select its own advisers and to say no indefinitely, (4) the special committee acts with care, (5) the minority vote is informed, and (6) there is no coercion on the minority. Almost as importantly, the Court upheld the grant of summary judgment to the defendants. As a result, the structure approved here will now be the gold standard for mergers involving a controlling stockholder.