Navigating the Post-SB 21 World of Conflict Transactions
Delaware’s entire fairness doctrine – response to which in part drove the SB 21 amendments to Delaware corporate law enacted on March 25, 2025 – is not dead. Thus, it is especially helpful that a new Delaware Court of Chancery opinion reminds us that conflict transactions that fail to meet safe harbors and are therefore […]
Posted by Ethan Klingsberg, Meredith Kotler, and Victor Ma, Freshfields Bruckhaus Deringer LLP, on Tuesday, May 27, 2025
Editor's Note:
Ethan Klingsberg and Meredith Kotler are Partners, and Victor Ma is an Associate at Freshfields Bruckhaus Deringer LLP. This post is based on their Freshfields memorandum and is part of the Delaware Law series; links to other posts in the series are available here.
Delaware’s entire fairness doctrine – response to which in part drove the SB 21 amendments to Delaware corporate law enacted on March 25, 2025 – is not dead. Thus, it is especially helpful that a new Delaware Court of Chancery opinion reminds us that conflict transactions that fail to meet safe harbors and are therefore subject to entire fairness scrutiny nonetheless have a pathway to dismissal on the pleadings.
This is an important reminder because:
- the new SB 21 statutory safe harbors from entire fairness review include several requirements with which plaintiffs will be on the look-out for non-compliance;
- there are costs (both monetary and from an execution perspective) to complying with some of these safe harbor criteria to which parties to conflict transactions are, from time to time, going to elect not to undertake; and
- the availability of dismissal on the pleadings of entire fairness cases holds out the potential to substantially reduce litigation costs.
