The New Paradigm (Burden) Shift: The Business Judgment Rule After KKR

December 2015

Publication| Corporate Transactions| Corporate & Chancery Litigation

The Delaware Supreme Court recently held thatan uncoerced, fully informed vote of a majority ofthe disinterested stockholders adopting a mergeragreement invoked the business judgment rule standardof review, even though the vote was statutorilyrequired. The opinion left unanswered the questionas to whether the business judgment rule invokedin that context was a rebuttable presumption ora substantive rule of law protecting the directors’decision. Two subsequent opinions of the Court ofChancery suggest that the business judgment ruleapplied in that context is a rebuttable presumption.

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