Richards Layton & Finger

Stockholder Ratification: A Review of the Benefits and Burdens

February 2009

For years, the applicability of the doctrine of stockholder ratification to various corporate transactions, as well as the effect of a ratifying vote, has been the subject of debate. The Delaware Supreme Court recently issued an opinion clarifying the doctrine, seeking to specify what it can and cannot validly accomplish. This opinion raises important issues for corporate practitioners and their clients in managing the deal process, particularly in navigating potentially disabling conflicts of interest.