In Long-Awaited Match Decision, Delaware Supreme Court Expands MFW Requirements In Conflicted Controller Transactions

Key Takeaways

• Delaware Supreme Court rejects attempt to limit MFW to controller buyout transactions.
• Supreme Court instead holds that all of MFW's requirements for shifting the standard of review from entire fairness to business judgment rule apply to every transaction in which a controller stands on both sides and receives a non-ratable benefit.
• Accordingly, both a special committee and an unaffiliated stockholder vote are required to invoke the business judgment rule—one or the other is not enough by itself.
• For a special committee to be independent for purposes of MFW, Supreme Court requires that each committee member, not just a majority, be independent.

The Delaware Supreme Court issued its decision in In re Match Group, Inc. Derivative Litigation,¹on April 4, 2024, in which it made two significant holdings. First, the Court refused to limit the MFW framework²to just those in which the controller seeks to acquire the shares of minority