It has been another busy year for the Delaware courts, with opinions issued in a number of key areas. The Delaware Supreme Court confirmed that Caremark claims, although generally very difficult to maintain, can survive a motion to dismiss. Meanwhile, the Court of Chancery showed that there is still a high bar to establishing a material adverse effect that will permit termination of a merger agreement, and that justifications by buyers to walk away from binding contracts will be heavily scrutinized. The courts’ decisions continued to clarify what information boards must disclose in order to ratify a third-party transaction under Corwin, what it means to be a “controlling stockholder,” and when the MFW standard of review will apply to transactions with a controller. The courts also re-emphasized the importance of deal price in determining fair value in an appraisal action, and expanded the types of documents that may be available to stockholders in a books and records action. Finally, the courts addressed the enforceability of advance notice bylaws and analyzed several recurring issues in the context of post-closing disputes.
Chief Justice Strine’s retirement in 2019 also marked the end of an era and resulted in some reshuffling on the Delaware courts. Justice Seitz was selected to replace Chief Justice Strine, and Vice Chancellor Montgomery-Reeves was elevated to become the first person of color and the third woman to serve on the Delaware Supreme Court. Earlier this month, her replacement, Paul Fioravanti Jr., was confirmed by the Delaware Senate as the newest Vice Chancellor of the Court of Chancery.