Controlling Stockholder "Going Private" Transactions after In Re MFW: Reasons to Be Wary of the Path to the Business Judgment Rule

In his recent In re MFW Shareholders Litigation opinion, Chancellor Leo Strine identifies a theoretical path by which controlling stockholder buyouts structured as negotiated mergers can obtain the relative protection of business judgment review. There are several reasons, however, that some controlling stockholders will choose to take their chances on “entire fairness” review, rather than embrace the carrot of business judgment offered in MFW.