Kahn v. M&F Worldwide Corp.
Annotate this CaseThe issue before the Supreme Court in this matter centered on a Court of Chancery decision arising from a 2011 acquisition by MacAndrews & Forbes Holdings, Inc. (M&F), a 43% stockholder in M&F Worldwide Corp (MFW), of the remaining common stock of MFW. M&F’s proposal to take MFW private was made contingent upon two procedural conditions. Appellants initially sought to enjoin the transaction. They withdrew their request for injunctive relief after taking expedited discovery, including several depositions. Appellants then sought post-closing relief against M&F, Ronald Perelman, and MFW’s directors for breach of fiduciary duty. Defendants then moved for summary judgment, which the Court of Chancery granted. Appellants raised two arguments on appeal: (1) the Court of Chancery erred in concluding that no material disputed facts existed regarding the conditions precedent to business judgment review; and (2) the Court of Chancery erred, as a matter of law, in holding that the business judgment standard applied to controller freeze-out mergers where the controller’s proposal is conditioned on both Special Committee approval and a favorable majority-of-the-minority vote.The Supreme Court concluded Defendants’ motion for summary judgment was properly granted on all of those issues. The Court determined that the business judgment rule standard of review applied to this controlling stockholder buyout.
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