Kahn v. M & F Worldwide Corp., Del. Supr., No. 334, 2013 (March 14, 2014)
The Delaware Supreme Court today affirmed the Court of Chancery’s decision granting summary judgment to the defendants under the business judgment standard of review (and not the entire fairness standard) where the controlling stockholder MacAndrews & Forbes conditioned its offer upon the MFW Board agreeing, ab initio, to two procedural protections, i.e., approval by a Special Committee and by a majority of the minority stockholders. ...
The Supreme Court stated:
To summarize our holding, in controller buyouts, the business judgment standard of review will be applied if and only if: (i) the controller conditions the procession of the transaction on the approval of both a Special Committee and a majority of the minority stockholders; (ii) the Special Committee is independent; (iii) the Special Committee is empowered to freely select its own advisors and to say no definitively; (iv) the Special Committee meets its duty of care in negotiating a fair price; (v) the vote of the minority is informed; and (vi) there is no coercion of the minority.
Go read the whole thing. It's a very important decision.