control test in Delaware

2018Ch. 2003). 113 Sciabacucchi, 2017 WL 2352152 , at *16. 114 See, e.g., id. at *1 (“I find—after review of the record, including a stockholders’ agreement, referenced in the Complaint, that limits Liberty Broadband’s ability to assert its will over Charter—that the Complaint fails to plead sufficient non-conclusory facts to make it reasonably conceivable that Liberty Broadband controls Charter.”); van der Fluit, 2017 WL 5953514 , at *7 (holding plaintiff had failed to plead facts that supported a reasonable inference regarding “the existence of a controller”); Larkin, 2016 WL 4485447 , at *1 (“P

2017A stockholder who owns less than 50% of the voting power of a corporation may still qualify as a controller—and owe the accompanying fiduciary duties—if he “exercises control over the business affairs of the corporation.”194 To invoke entire fairness, the Complaint must contain well-pled facts “demonstrating [the stockholder’s] actual control with regard to the particular transaction that is being challenged.”195 This actual control test is “not an easy one to satisfy” as “stockholders with very potent clout have been deemed, in thoughtful decisions, to 193 In re KKR Financial Holdings LLC Sha

2025In Cysive, the Court noted that, “[w]hen considering options, th[e] [control] group—taken together—controlled about 40% of the voting equity,” but did not state to what degree the options factored into the control analysis. 836 A.2d at 535 .

2024An individual might hold “high-status roles like CEO, Chairman, or founder.” 588 Or an 586 JX-1234 at 25–26 (5/28/20 Schedule 14A) (noting Tesla’s successful opposition to the 2014 and 2016 proposals to move to simple majority voting). 587 Basho, 2018 WL 3326693 , at *27, n.322 (“[T]he explicit or implicit threat of retaliation will carry much more weight if it comes from a . . . defendant who controls 25% of the voting power of the company, . . . and serves as Chairman of the Board with the power to call board meetings and set the agenda.”); see also Cysive, 836 A.2d at 551–53 (incorporating

2021Ch. 2003). 244 Larkin, 2016 WL 4485447 , at *14; see also Morton’s, 74 A.3d at 65 (characterizing Cysive as the “most aggressive finding that a minority blockholder was a controlling stockholder”); but see Rouse, 2018 WL 1226015 , at *19 n.163 (noting “[i]t is likely that more ‘aggressive’ examples can be found in our post-Cysive case law, but Cysive is still generally regarded” as an aggressive example of our controller jurisprudence). 63 members” of the controller served in executive positions.245 Evidence of managerial clout, combined with the stockholder’s “unified voting coalition” totali

2016Ch. 2013) (quoting PNB, 2006 WL 2403999 , at *9). 74 PNB, 2006 WL 2403999 , at *9 (“[The actual control test] is not an easy one to satisfy and stockholders with very potent clout have been deemed, in thoughtful decisions, to fall short of the mark.”); Morton’s, 74 A.3d at 665 (“[T]he minority blockholder’s power must be ‘so potent that independent directors . . . cannot freely exercise their judgment, fearing retribution’ from the controlling minority blockholder.” (quoting PNB, 2006 WL 2403999 , at *9)); see also KKR Fin.

2016See supra note 68. 140 These facts would aid in a determination of whether, for example, an additional issuance of preferred shares had a substantial or merely de minimis effect on the Plaintiffs’ ownership interests in Simbol. 141 I list these factual lacunae not to imply that any one alone is a fatal defect, but to put what is pled in context. 142 Ivanhoe Partners v. Newmont Mining Corp., 535 A.2d 1334, 1344 (Del. 1987). 31 voting power of the company, or exercises ‘actual control’ over the board of directors during the course of a particular transaction.”143 With respect to the control requ

2014The following is a non-exhaustive list of significant cases where the parties disputed whether a non-majority stockholder satisfied this actual control test. 49 Kahn v. Lynch Commc’n Sys., Inc., 638 A.2d 1110, 1113 (Del. 1994). 50 Id. at 1113-14 (quoting Ivanhoe P’rs v. Newmont Mining Corp., 535 A.2d 1334, 1344 (Del. 1987)); see also Weinstein Enters., Inc. v. Orloff, 870 A.2d 499, 507 (Del. 2005) (“For a stockholder that owns less than a numerical majority of a corporation‟s voting shares to be deemed a controlling stockholder for purposes of imposing fiduciary obligations, the plaintiff must

2014The following is a non-exhaustive list of significant cases where the parties disputed whether a non-majority stockholder satisfied this actual control test. 49 Kahn v. Lynch Commc’n Sys., Inc., 638 A.2d 1110, 1113 (Del. 1994). 50 Id. at 1113-14 (quoting Ivanhoe P’rs v. Newmont Mining Corp., 535 A.2d 1334, 1344 (Del. 1987)); see also Weinstein Enters., Inc. v. Orloff, 870 A.2d 499, 507 (Del. 2005) (“For a stockholder that owns less than a numerical majority of a corporation‟s voting shares to be deemed a controlling stockholder for purposes of imposing fiduciary obligations, the plaintiff must

2014The following is a non-exhaustive list of significant cases where the parties disputed whether a non-majority stockholder satisfied this actual control test. 49 Kahn v. Lynch Commc’n Sys., Inc., 638 A.2d 1110, 1113 (Del. 1994). 50 Id. at 1113-14 (quoting Ivanhoe P’rs v. Newmont Mining Corp., 535 A.2d 1334, 1344 (Del. 1987)); see also Weinstein Enters., Inc. v. Orloff, 870 A.2d 499, 507 (Del. 2005) (“For a stockholder that owns less than a numerical majority of a corporation‟s voting shares to be deemed a controlling stockholder for purposes of imposing fiduciary obligations, the plaintiff must

2017Ch. 2014). 194 See Kahn v. Lynch Commc'n Sys., Inc., 638 A.2d 1110 , 1113–14 (Del. 1994) (internal quotations omitted). 195 In re KKR, 101 A.3d at 991 (citations omitted); see In re Primedia Inc. Derivative Litig., 910 A.2d 248, 257 (Del.

2014The following is a non-exhaustive list of significant cases where the parties disputed whether a non-majority stockholder satisfied this actual control test. 49 Kahn v. Lynch Commc’n Sys., Inc., 638 A.2d 1110, 1113 (Del. 1994). 50 Id. at 1113-14 (quoting Ivanhoe P’rs v. Newmont Mining Corp., 535 A.2d 1334, 1344 (Del. 1987)); see also Weinstein Enters., Inc. v. Orloff, 870 A.2d 499, 507 (Del. 2005) (“For a stockholder that owns less than a numerical majority of a corporation‟s voting shares to be deemed a controlling stockholder for purposes of imposing fiduciary obligations, the plaintiff must