They cited to Cigna Health & Life Insurance Company v. Audax Health Solutions as support for the proposition that, as stockholders who did not consent to the merger, they cannot be bound by the indemnification obligations. In Cigna, the Court concluded that the indemnification obligation imposed by the merger agreement was void and unenforceable because it violated 8 Del. C. § 251. The post-closing adjustments permitted by the merger agreement as indemnification were not limited in amount or in duration.

2 Recent cases have focused on three areas: (1) the scope of the business judgment rule; (2) the adequacy of disclosures and coercion; and (3) the burdens of pleading and proof. Scope of Business Judgment Rule The Delaware Supreme Court recently confirmed the application of Corwin to tender offers executed under 8 Del. C. § 251(h) and affirmed a decision where the Court of Chancery determined that when Corwin applies, the business judgment rule is “irrebuttable,” leaving only a claim for waste. In June 2016, the Court of Chancery in In re Volcano Corp. Stockholder Litigation3 extended Corwin to stockholder acceptance of a tender offer executed pursuant to 8 Del. C. § 251(h).

Ch. June 19, 2008) (C. Chandler)June 19, 2008In this combined appraisal and breach of fiduciary duty action, the Court of Chancery granted partial summary judgment on several of plaintiffs’ non-appraisal claims. Of particular note are the Court’s rulings with respect to plaintiffs’ disclosure claims and plaintiffs’ claim that the merger was not approved by shareholders as required by 8 Del. C. 251(c). The case arose from the merger of Transkaryotic Therapies, Inc. (“TKT”) with and into Shire Pharmaceuticals, PLC (“Shire”).

On July 13, 2017, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery dismissed a former stockholder’s breach of fiduciary duty claims against the former directors of Diamond Resorts International (“Diamond”) and an aiding and abetting claim against Diamond’s financial advisor in connection with Apollo Global Management LLC’s (“Apollo”) acquisition of Diamond in a two-step merger under Section 251(h) of the Delaware General Corporation Law, 8 Del. C. § 251(h). Appel v. Berkman, C.A. No. 12844-VCMR (Del. Ch. July 13, 2017).

The amendments to the DGCL and the LLC Act as more fully described below will go into effect on or apply to mergers and transactions entered into on, or after, August 1, 2016.2016 Amendments to the DGCL: While a number of the 2016 Amendments to the DGCL are significant, perhaps the most noteworthy are those (1) that relate to, and limit, appraisal proceedings under 8 Del. C. § 262; (2) that relate to mergers under 8 Del. C. § 251(h); and (3) that relate to the jurisdiction of the Court of Chancery under 8 Del. C. § 111.Jurisdiction of the Court of Chancery under Section 111(a): Section 111(a) of the DGCL generally governs the Court of Chancery’s subject matter jurisdiction over civil actions regarding the interpretation, application, enforceability or validity of any “corporate instruments and provisions of” the DGCL, including, inter alia, the certificate of incorporation, bylaws, etc. 8 Del. C. § 111.

transaction in which (i) AHP would first reincorporate in Nevada, (ii) AHP would then commence a self tender for all its shares not owned by Highland, (iii) all of the members of AHP’s board would thereafter resign and the board vacancies would be filled by Highland designees, and (iv) AHP would merge with an indirect wholly owned subsidiary of Highland and, pursuant to such merger, all of the stockholders who did not tender in the self-tender offer (other than Highland) would be cashed out at the same price as the self-tender. The complaint alleged that, although the self-tender was negotiated and agreed to in the context of a restructuring transaction, Highland and AHP did not actually execute a restructuring agreement until nearly a year after the terms had been negotiated.Following the self-tender offer, Highland owned more than 78% of AHP’s outstanding stock and proposed to AHP’s board, consisting of Furlong and Highland designees, that AHP merge with Highland’s subsidiary under 8 Del. C. § 251. The merger was approved by AHP’s board, submitted to the stockholders with the board’s favorable recommendation, and consummated.