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Pleading-Stage Dismissal via Corwin Denied to 34.8% Stockholder Alleged To Control Both Sides of Challenged Transaction

Posted by on Thursday, September 2, 2021 in Delaware Corporate Law Bulletins, En Banc, Volume 74.

Robert S. Reder & John K. Neal, Jr. | 74 Vand. L. Rev. En Banc 419 (2021) |

Under the Delaware Supreme Court’s landmark ruling in Corwin v. KKR Fin. Holdings LLC, 125 A.3d 304 (Del. 2015) (“Corwin”), a transaction “approved by a fully informed, uncoerced vote of the disinterested stockholders” will attract business judgment review, thereby paving the way to pleading-stage dismissal of stockholder challenges. In this manner, Corwin is said to effectively cleanse fiduciary breaches. Not surprisingly, Corwin has become a powerful defense for corporate fiduciaries seeking to defeat post-closing damages actions arising from a variety of commercial transactions. 

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Robert S. Reder

John K. Neal, Jr.