Richards Layton & Finger
 

Chancery Court Discusses Continued Viability of Blasius Standard

August 29, 2012

Recently, in Keyser v. Curtis, 2012 WL 31154353 (Del. Ch. July 31, 2012), the Court of Chancery applied the entire fairness standard when considering a challenge to the issuance of super-voting preferred stock. Although the preferred stock had been issued as part of an effort to prevent stockholders from electing a new board, Vice Chancellor John W. Noble found that the Blasius standard was not applicable. Rather, because the sole director stood on both sides of the preferred stock issuance, the court determined that entire fairness was the applicable standard. The decision provides helpful guidance concerning the continued viability of the Blasius standard and how it may be incorporated into Delaware's other standards of review.