In two recent cases, the Delaware Court of Chancery provided informative guidance on when stockholders that hold less than 50% of a corporation’s stock are nevertheless considered to be controlling stockholders. This inquiry is critical in the context of a takeover, as transactions with a controlling stockholder may be reviewed under the heightened “entire fairness” standard unless the corporation can demonstrate that it has satisfied the conditions laid out by the Delaware Supreme Court in Kahn v. M&F Worldwide Corp., in which case the transaction will be reviewed under the less stringent “business judgment” standard.

Read the full memo, Who’s the Boss? Minority Stockholders That Exercise Control.