The Delaware Court of Chancery, in Lance Salladay v. Bruce L. Lev, et al. [Intersections], C.A. No. 2019-0048-SG, memo. op. (Del. Ch. Feb. 27, 2020), found that appointment of a special committee to consider a controlling stockholder transaction was ineffective for purposes of standard shifting under In re Trados, Inc. Shareholder Litigation, C.A. No. 1512-VCL (consol.), opinion (Del. Ch. Aug. 16, 2013), where plaintiff alleged that the committee was not constituted before substantive economic discussions, and that stockholder ratification under Robert A. Corwin, et al. v. KKR Financial Holdings, LLC, et al., No. 629, 2014, opinion (Del. Oct. 2, 2015), because the company did not disclose all material information about the transaction to stockholders.

NEW:  K&L Gates discusses the decision in Delaware Holds That A Special Committee Formed Ab Initio Will Cleanse A Conflicted Transaction In The Context of a Majority-Conflicted Board and Underscores the Importance of Disclosures Regarding Financial Advisors.

Cooley discusses the decision in Whataday for Special Committees: Salladay v. Lev Clarifies Committee Formation Requirements in Non-MFW Scenarios.

Proskauer Rose discusses the decision in Delaware Chancery Holds Early Committee Appointment Necessary to Cleanse Conflict from Corporate Transactions.

Pepper Hamilton discusses the decision in Boards of Directors May Be Required to Disclose Reasons Behind Financial Advisor Withdrawal.

Hunton Andrews Kurth discusses the decision in Does Special Committee Approval Protect a Transaction Involving a Conflicted Board Majority?

White & Williams discusses the decision in Delaware Chancery Court Holds That a Transaction Involving a Conflicted Board Majority Can Be Cleansed If Appropriate Safeguards Are Implemented.

Morris James discusses the decision in Belated Use of Special Committee and Uninformed Stockholder Vote Undermine Bid for Business Judgment Review of Going-Private Merger.

Shearman & Sterling discusses the decision in Delaware Court Of Chancery Holds That A Special Committee Must Be Constituted Ab Initio In Order To Cleanse A Transaction Involving A Conflicted Board Majority.

Pepper Hamilton discusses the decision in Ab Initio 2.0: Even Without a Controller, Special Committees Must Be Formed Before Economic Negotiations Begin.

Saul Ewiing discusses the decision in Roads to Business Judgment Protection in Transactions with Majority-Conflicted Boards.

Paul Weiss discusses the decision in Delaware Court of Chancery Provides Guidance around Special Committee Approvals in Non-Controller Conflicted Transactions.

Francis Pileggi discusses the decision in Chancery Determines Standard Applicable to Contested Transaction.

$$$ Law360 discusses the decision in Chancery Won’t Free Identity Guard Makers From Merger Suit.

$$$ Bloomberg News discusses the decision in Intersections Board Members Must Face Class Action Over 2018 Buy.