Change of control situations such as a sale of a corporation give rise to Revlon duties, which require a corporation's board of directors to take reasonable steps to obtain the best price available for the benefit of the corporation's stockholders. Following the 1986 Revlon decision, Revlon claims have been infrequently litigated, with the first successful claim occurring in 2014 in the Court of Chancery's decision in Rural Metro (later affirmed by the Delaware Supreme Court).       

Recently, however, in In re Mindbody, Inc. Stockholder Litigation, C.A. No. 2019-0442-KSJM, Memo Op. (Del. Ch. Mar. 15, 2023), Chancellor McCormick issued a post-trial opinion finding Revlon liability. The Chancellor held:  

Plaintiffs proved that this case fits the [Revlon] paradigm. [The target’s CEO] suffered a disabling conflict because he had an interest in near-term liquidity, a desire to sell fast, and an expectation that he would receive post-Merger employment accompanied by significant equity-based incentives as [CEO of an “ex-public company” owned by a private equity acquirer]. [The CEO] tilted the sale process by strategically driving down [target company’s] stock price and providing [acquirer] with informational and timing advantages during the due-diligence and go-shop periods. And the Board failed to adequately oversee [the CEO].

The Chancellor also entered judgment in Plaintiffs' favor on their claims against the acquirer for aiding and abetting the target CEO's breach of fiduciary duty. The target CEO and acquirer were found to be jointly and severally liable.