Supreme Court Limits Application of Corwin Doctrine

The recent decision of the Delaware Supreme Court in Morrison v. Berry, et al., Del. Supr., C.A. No. 445, 2017, July 9, 2018 (revised July 27, 2018), limited the application of the Corwin doctrine and prohibited the cleansing effect of stockholder approval, in part due to inadequate disclosures. See Corwin v. KKR Fin. Holdings LLC, 125 A.3d 305, 312 (Del. 2015). See also Appel v. Berkman, 180 A.3d 1055, 1064 (Del. 2018). The court began the opinion with “. . . a cautionary reminder to directors and the attorneys who help them draft their disclosures: partial and elliptical disclosures cannot facilitate the protection of the business judgment rule under the Corwin doctrine.” See footnote 1. Key Principles Articulated by Delaware’s High Court: The court explained that under the Corwin doctrine: “The business judgment rule is invoked as the appropriate standard of review for a post-closing damages action when a merger that is not subject to the entire…

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