The Delaware Supreme Court issued a decision on Friday that should make it harder for plaintiffs lawyers to argue that certain going-private transactions are unfair to shareholders. The ruling is a win for billionaire Ronald Perelman’s company MacAndrews & Forbes Holdings Inc. and defense lawyers at Skadden, Arps, Slate, Meagher & Flom and Willkie Farr & Gallagher.
In a 39-page ruling, the court dismissed a suit alleging that MacAndrews & Forbes enriched itself at the expense of shareholders when it took over an affiliate in 2011. More significantly, the court clarified that it won’t second-guess the fairness of deals in which a controlling shareholder buys out minority stock owners, so long as two conditions are met: that an independent committee is appointed to review the deal and that the deal is approved by a majority of minority shareholders.
