Publications

May 28, 2010

Delaware Chancery Court Addresses Standards of Review in Controlling Stockholder Freezeouts

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In In re CNX Gas Corp. Shareholders Litigation, the Delaware Court of Chancery addressed the standard of review applicable to controlling stockholder freezeouts. In a departure from the standard applied in other Chancery Court decisions, the Court held that entire fairness applies to a controlling stockholder freezeout tender offer unless the tender offer is (i) negotiated and affirmatively recommended by a special committee of independent directors and (ii) conditioned on the affirmative tender of a majority of the minority shares.