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An Introduction to the Law of Corporations: Cases and Materials, Fall 2017

Corwin v. KKR FINANCIAL HOLDINGS LLC

Headnote

In Corwin, the court takes up the question of what is the appropriate standard of review for a challenged merger transaction during a post-closing damages trial, where the directors are disinterested and the transaction has been approved by an informed vote of the stockholders. In such situations, where the stockholders are fully-informed and their vote has not been coerced, courts will be loathe to substitute their own business judgment for that of the stockholders. This result – essentially raitifcation by the stockholders – is consistent with the court’s previous rulings with which you are already familiar (e.g. Williams v. Geier).