In re Solera Holdings, Inc. Stockholder Litigation

The Delaware Court of Chancery dismissed a complaint that alleged breach of fiduciary duty against directors that approved a merger. The Court concluded that the merger, which would generally have been subject to enhanced scrutiny review, was cleansed by the fully informed, uncoerced vote of the disinterested stockholders. As a result, the business judgment rule applied and, in order to move forward, the plaintiff was required to prove that the directors’ decision constituted waste.

BOTTOM LINE: The fully informed, uncoerced vote of a disinterested majority of shareholder will cleanse a challenged transaction that would generally be subject to enhanced scrutiny.