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Entire fairness doesn't mean perfection

The Delaware Court of Chancery and Supreme Court have recently ruled on cases related to the entire fairness standard, as covered in a recent article. In summary, the entire fairness standard is applied in corporate transactions in which a majority of the corporate board or a controlling stockholder has a potentially conflicting interest. The entire fairness standard requires directors or a controlling stockholder to demonstrate that the transaction was entirely fair to the corporation, requiring intensive factual inquiries into the economics of the transaction (fair price) and the process leading to the transaction (fair dealing). Given this fact intensive inquiry, motions to dismiss fiduciary duty claims where the entire fairness standard applies are rarely granted. This article discusses the recent success by defendants at trial in satisfying the entire fairness standard and explaining that entire fairness doesn't mean perfection.   


delaware court of chancery