Attorneys Analyze Court’s Decision to Equate Tender of Shares to Stockholder Vote in Review of Board Decisions

Business & securities litigation partner Anne Johnson Palmer and corporate associate Peter Wang (both of San Francisco) co-authored an article that examines the Delaware Chancery Court’s decision in In re Volcano Corporation Stockholder Litigation where the court held that business judgement review indisputably applies to board decisions in mergers where a majority of the company's outstanding stockholders consent to tender their shares in a two-step merger pursuant to Section 251(h) of the Delaware General Corporation Law. Although such tender offers are not formal stockholder votes, the court held that the acceptance of a tender offer by a majority of the stockholders will have the same cleansing effect on board decisions under Delaware law as the approval of a merger by a majority of stockholders. The piece was published in the International Law Office Corporate Finance/M&A Newsletter on Oct. 12.