Following Delaware’s Lead, New York Adopts Business Judgment Rule for Controlling Shareholder Going-Private Mergers Where Certain Minority Shareholder Protections are Present
13 May 2016
In In the Matter of Kenneth Cole Productions, Inc., Shareholder Litigation (In re KCP), New York State’s highest court applied the business judgment rule in a challenge to a one-step, controlling shareholder going-private merger transaction where certain protections for the minority shareholders were present from the outset. The decision brings New York in line with the Delaware Supreme Court’s decision in Kahn v. M&F Worldwide Corp., 88 A3d 635 (Del. 2014) (MFW), which adopted the same business judgment rule standard of review for controlling shareholder going-private mergers where the same protections are present.