Adrienne Ward Quoted in Agenda on Delaware’s Raised Standards for Special-Committee Independence

Olshan litigation partner Adrienne Ward was quoted in an Agenda article (subscription required) on the Delaware Supreme Court’s April decision in In re Match Group, Inc. Derivative Litigation. In the decision, the Court held that Delaware companies seeking to receive the less stringent business judgment standard of review in transactions involving controllers must ensure that the committee approving the deal is composed entirely of independent directors. Adrienne advises that boards will want to take a closer look at the independence of committees tasked with overseeing transactions: “When it’s time to form special committees, I think [boards] really need to give a second look at who’s chosen for those committees, and really consider personal relationships.” While the Court made clear in its opinion that the MFW framework—which requires transactions to be negotiated by an independent committee and approved by a vote of an informed majority of minority stockholders when controllers are involved—applies to all transactions involving controllers, Adrienne explains that the bigger takeaway is the court’s special-committee independence findings. Previously, she says, it was unclear whether the committee had to be entirely made up of independent directors. “I think the takeaway is to do refreshers [on independence],” Adrienne concludes. “If you’re on a board, do a fresh assessment at the time of the transaction.”