In Maffei v. Palkon, No. 125, 2024, 2025 Del. LEXIS 51 (Del. Feb. 4, 2025) (Valihura, J.), the Delaware Supreme Court held that a corporation’s decision to reincorporate in another state purportedly to reduce exposure to potential future litigation risk is subject to the deferential business judgment rule, as long as the decision is not alleged to have been made to avoid any existing or threatened litigation or in contemplation of a specific transaction. Reversing the decision of the Delaware Court of Chancery [see blog article here], the Supreme Court concluded that reduced exposure to potential liabilities that a controlling stockholder may face in the future is not a material, non-ratable benefit triggering the exacting entire fairness standard of review. Continue Reading Delaware Supreme Court Holds Business Judgment Governs Decision to Reincorporate Outside of Delaware For Purpose of Reducing Litigation Exposure In the Absence of Existing or Threatened Litigation
