The Delaware Supreme Court Provides Guidance on Directors’ Fiduciary Duty of Disclosure

April 2018

Publication| Corporate Transactions| Corporate & Chancery Litigation

In Appel v. Berkman, the DelawareSupreme Court reversed the Delaware Courtof Chancery’sdismissal of claims relating to themerger of Diamond Resorts International,Inc. (“Diamond”), finding that the stockholdersof Diamond were not fully informedwhen they tendered their shares in a first-step tender offer followed by a back-end mergerunder Section 251(h) of the DelawareGeneral Corporation Law (DGCL). Inreversing the Chancery Court, the SupremeCourt held that Diamond’s failure to disclosethe specific reasons for which its founder andchairman had abstained from approving thetransaction rendered the disclosure documentmaterially misleading.

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