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In re MFW Shareholders Litigation

Delaware Court of Chancery
2013 WL 2436341 (Del. Ch. 2013)


Facts

Ronald Perelman (defendant) owned MacAndrews & Forbes Holdings Inc. (MacAndrews & Forbes) (defendant). MacAndrews & Forbes held 43 percent of M & F Worldwide Corp. (MFW) stock and offered to buy the rest of MFW's stock. MacAndrews & Forbes said upfront that any going-private transaction would be conditioned on the approval of an independent special committee and a vote of a majority of the minority shareholders. An independent special committee was formed. The committee retained its own legal and financial advisors. It met eight times to negotiate with MacAndrews & Forbes and got the price raised a significant amount. The merger was approved by the special committee and an informed vote of a majority of the minority MFW shareholders. There was no failure of disclosure. MFW's public shareholders (plaintiffs) challenged the transaction, urging the application of the entire fairness standard. The defendants moved for summary judgment, arguing that the standard of review should be the business judgment rule.

Rule of Law

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Issue

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Holding and Reasoning (Strine, J.)

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  • A "yes" or "no" answer to the question framed in the issue section;
  • A summary of the majority or plurality opinion, using the CREAC method; and
  • The procedural disposition (e.g. reversed and remanded, affirmed, etc.).

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