The Delaware Chancery Court subjected a cash-out merger transaction to heightened review under the entire fairness standard. The court held that the four shareholders who were not cashed out acted in concert and therefore constituted a control group owing fiduciary duties to the minority shareholders. In so holding, the court found that the control group and the minority shareholders were "competing" for the consideration to be paid in the cash-out merger transaction. The court applied the entire fairness standard due to the cash-out merger transaction failing to be conditioned upon "robust procedural protections" such as approval by a majority of the minority shareholders.
Frank v. Elgamel, C.A. No. 6120-VCN (Del. Ch. Ct. March 30, 2012).