Cracking the Corwin Conundrum and Other Mysteries Regarding Shareholder Approval of Mergers and Acquisitions

Abstract

This article responds to the Delaware Supreme Court’s important decision in Corwin v. KKR Financial Holdings, which declared that an informed and un-coerced shareholder vote in favor of a merger should lead courts to look skeptically at claims that directors breached their fiduciary duty in making the deal. The article will address the unintended consequences, unanswered questions and outright conundrum created by Corwin. The article’s central insight is that courts need to understand what shareholder approval is really telling us in light of the limited choice that shareholders have in front of them when voting on a proposed merger.

Keywords: Merger litigation, shareholder approval