Kahn v. Stern

Summary

The Supreme Court of Delaware affirmed the Court of Chancery’s judgment because the pleaded facts did not support a rational inference that the directors committed a non-exculpated fiduciary breach by diverting merger consideration to two management directors. The court emphasized that the transaction followed a thorough market check and involved a buyer without prior ties to management. It rejected broader suggestions that a plaintiff must always plead a non-exculpated breach by a majority of the board or eliminate every explanation other than bad faith.