Overview
- In a unanimous en banc decision on Feb. 27, the Delaware Supreme Court in Rutledge v. Clearway upheld the 2025 amendments to DGCL §144, rejecting claims that the law violates equity jurisdiction or due process.
- For controller transactions that are not going‑private, statutory protection from equitable relief or damages can be obtained through either approval by an independent, empowered board committee or a majority‑of‑the‑minority stockholder vote.
- Going‑private deals remain subject to a dual‑protection regime requiring both independent committee approval and a majority‑of‑the‑minority vote to secure business‑judgment protection.
- The amendments apply retroactively to earlier transactions, except for cases pending or completed by Feb. 17, 2025, and the Court of Chancery retains authority to hear fiduciary duty claims and determine statutory compliance.
- The decision confirms a statutory definition of controlling stockholder and prompts companies to tighten independence, disclosure, and good‑faith procedures as boards and counsel update governance and deal playbooks.