Richards Layton & Finger

Olenik v. Lodzinski: More on Structuring Controlling Stockholder Buyouts

May 2019

In Olenik v. Lodzinski, the Delaware Supreme Court provided further guidance regarding the circumstances under which the deployment of procedural protective devices pursuant to the so-called MFW standard—namely, the transaction’s negotiation and approval by an independent special committee and its adoption by a majority-of-the-minority vote—can operate to restore the presumption of the business judgment rule to a controlling stockholder buyout. Specifically, the Court provided additional clarity around the point in time in the process by which the controller must affirm that its transaction will not proceed without those conditions in place.