April 6, 2020

Wolf Popper Partner Carl Stine Authors Article on Delaware Law Appearing in the Delaware Journal of Corporate Law

“Many forms of conduct permissible in a workaday world for those acting at arm’s length, are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior.”

These immortal words by then Chief Judge Benjamin Cardozo in Meinhard v. Salmon frame a law review article written by Wolf Popper partner Carl Stine concerning a recent decision by the Delaware Supreme Court, Kahn v. M&F Worldwide Corp. (“MFW”).  The decision sets out a pathway for a controlling shareholder of a corporation to avoid judicial scrutiny of a buyout of the minority shares of that company, despite being a fiduciary to those minority shareholders and regardless of whether the transaction is or is not fair.  The article, titled “MFW and the Legal Fiction of Market Equivalency,” was published in Volume 44 of the nationally recognized Delaware Journal of Corporate Law.  First, the article sets out the history leading up to the MFW decision, then describes the rationale for the decision and details concerning its analysis, and ultimately concludes that the decision was wrongly decided because it strays far from the fiduciary ideals as expressed by Cardozo and others.  The article can be seen here:  /docs/Stine%20-%20Delaware%20J%20of%20Corp%20Law%20-%20MFW%20%26%20Legal%20Fiction%20of%20Mkt%20Equivalency.pdf