When Investor Talks Render Biz Judgment Review Unavailable

Law360 (August 7, 2020, 5:35 PM EDT) -- In In re: HomeFed Corporation Stockholder Litigation on July 13, the Delaware Court of Chancery held that the going-private transaction involving HomeFed Corporation and its controlling stockholder, Jefferies Financial Group Inc., did not meet the prerequisites set down in its 2014 decision in Kahn v. M&F Worldwide Corp., or MFW, for business judgment review.

At the pleading stage of litigation, Chancellor Andre G. Bouchard found that MFW's ab initio requirement had not been met — that is, that the controller had not conditioned the proposed transaction on approval by both an independent special committee and a majority of the minority stockholders before the controller...

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