In the context of an M&A transaction, practitioners are routinely left to navigate the various standards of review that are applied by the Delaware courts to evaluate whether a Delaware corporation’s directors have complied with their fiduciary duties. Determining which standard of review will apply to a given transaction is particularly critical — depending on the applicable standard, a Delaware court may heavily scrutinize a transaction or determine that the directors may face personal liability for their decisions in connection with the transaction. The flowchart below has been prepared to serve as a quick-reference tool for M&A practitioners when determining which standard of review might apply. While this chart has been prepared in accordance with applicable case law decided to date, it is important to bear in mind that each step set forth below necessarily involves a fact-intensive analysis and that this flowchart should not be exclusively relied upon.
The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.