Famed Delaware Chancellor William Allen once compared the corporate law doctrine of waste to one of the most famous cryptids:
Absent an allegation of fraud or conflict of interest courts will not review the substance of corporate contracts; the waste theory represents a theoretical exception to the statement very rarely encountered in the world of real transactions. There surely are cases of fraud; of unfair self-dealing and, much more rarely negligence. But rarest of all-and indeed, like Nessie, possibly non-existent-would be the case of disinterested business people making non-fraudulent deals (non-negligently) that meet the legal standard of waste!
Steiner v. Meyerson, CIV. A. 13139, 1995 WL 441999, at *5 (Del. Ch. July 19, 1995)
Vice Chancellor Glasscock has gone him one better:
In the cryptozoological division of equity's menagerie are a number of rarae aves and chimeras—some, perhaps, not so chimerical as once thought. One unusual denizen is on display here. A stockholder brought a purported derivative action, alleging that insiders had structured an acquisition unfair to the corporation. The action withstood a motion to dismiss, and the corporation formed a special litigation committee of the board to evaluate the claim. I then stayed the matter for several months, to allow the special litigation committee, assisted by its own counsel, to consider the cause of action. Ultimately, the special litigation committee found that it was in the corporate interest that the cause of action be pursued, and determined that that asset would best be monetized on behalf of the corporation by allowing the original plaintiff to proceed, derivatively.
In re Oracle Corp. Derivative Litig., CV 2017-0337-SG, 2019 WL 6522297, at *1 (Del. Ch. Dec. 4, 2019)
