October 18, 2016

In re OM Group: Another Notch in Corwin’s Belt

This Morris James blog notes the Delaware Chancery Court’s recent decision in In re OM Group Stockholders Litigation – the latest in a series of decisions interpreting the Corwin standard.  Here’s a excerpt:

Under the recent Corwin decision, a fully-informed vote by uncoerced and disinterested stockholders to approve a merger invokes the business judgment rule and effectively precludes almost any claim the merger was improper. Here, the alleged disclosure violations concerned (i) information regarding a competing bid, (ii) potential conflicts involving one director, and (iii) the banker’s compensation and potential conflicts.

Vice Chancellor Slights rejected each of the alleged disclosure violations – and explained when proxy disclosures are sufficient to invoke Corwin. He held that Corwin applied & that the board’s decision was protected by the business judgment rule.

John Jenkins