Chancery Court Dismisses Fiduciary Duty Claims Despite Unavailability of Business Judgment Rule under Corwin

On November 30, 2017, in van der Fluit v. Yates, the Delaware Court of Chancery dismissed a post-closing damages claim alleging that target Opower’s directors violated their fiduciary duties while negotiating a two-step merger under Section 251(h) of the DGCL. The Court found that the offer documents’ failure to disclose that fiduciaries negotiating the transaction would receive post-transaction employment and the right to rollover unvested options amounted to a material omission. Therefore, the Court concluded that stockholders were not fully informed, rendering the business judgment rule under Corwin cleansing unavailable.