Fiduciary Duties in Mergers and Acquisitions: Revlon, MFW, Appraisal, and the Standard of Review

Document type: Article Practice area: Business and Corporate — Mergers and Acquisitions Jurisdiction: Delaware (with general application) Last reviewed: 5 September 2026

Here is the thing most directors do not understand until a lawyer explains it, usually in a conference room at eleven at night three days before signing:

The standard of review is the case.

If a court applies the business judgment rule, the plaintiff has to plead facts showing the directors were disloyal, uninformed to the point of gross negligence, or acting in bad faith — and almost no one clears that bar. If a court applies entire fairness, the defendants bear the burden of proving both fair dealing and fair price, the case survives a motion to dismiss essentially by definition, and the parties are looking at years of discovery, expert valuation testimony, and a trial.

The difference between those two worlds is not the merits of the deal. It is the structure of the process, decided months earlier, usually before anyone had thought about litigation at all.

That is what makes deal governance worth doing properly. Not because directors are likely to be found liable — they rarely are — but because the difference between a motion to dismiss granted at the pleading stage and a four-year fiduciary duty case is worth a great deal of money and a great deal of everyone's attention.

Three standards, and how a deal lands in one

Delaware law sorts transactions among three standards of review. Everything in this area is an argument about which one applies.

The business judgment rule

The default. A presumption that in making a business decision, directors acted on an informed basis, in good faith, and in the honest belief that the action was in the corporation's best interests. A court will not second-guess the substance.

To rebut it, a plaintiff must plead particularized facts showing a breach of the duty of care (gross negligence in becoming informed), the duty of loyalty (a conflict, or a lack of good faith), or that the board acted for an improper purpose.

Aronson v. Lewis, 473 A.2d 805 (Del. 1984) framed the presumption in its familiar form, and although its demand futility test has been restated, the description of the rule remains the starting point.

The duty of care is largely exculpated. Section 102(b)(7) of the Delaware General Corporation Law permits a charter provision eliminating director liability for duty-of-care breaches, and virtually every public company has one. Malpiede v. Townson, 780 A.2d 1075 (Del. 2001) confirmed that where a complaint pleads only a care violation and the charter has an exculpatory provision, the claim is dismissed. The practical consequence is that duty-of-care claims against directors of public companies are rarely viable, and plaintiffs must plead loyalty or bad faith.

But process still matters enormously, because process is the evidence from which loyalty and good faith are inferred — and because exculpation does not protect officers to the same degree, does not apply to injunctive relief, and does not apply to the transaction itself.

Smith v. Van Gorkom, 488 A.2d 858 (Del. 1985) remains the cautionary case. The Trans Union board approved a leveraged buyout after a two-hour meeting, on an oral presentation, with no written materials, no valuation study, and no market check. The Delaware Supreme Court found the directors grossly negligent in failing to inform themselves. The decision produced § 102(b)(7) within months, but the lesson it teaches about process has outlived the liability it imposed.

Enhanced scrutiny

An intermediate standard applied where the structure of the decision creates a risk that directors' interests diverge from stockholders' — most importantly, defensive measures and change-of-control transactions.

Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985) governs defensive measures. Because a board responding to a hostile bid faces "the omnipresent specter that a board may be acting primarily in its own interests," directors must show (1) reasonable grounds for believing a danger to corporate policy and effectiveness existed, and (2) that the response was reasonable in relation to the threat posed. The second prong was refined to require that the response be neither coercive nor preclusive, and otherwise within a range of reasonableness.

Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986) governs the sale of control. When a company is up for sale, the board's role changes "from defenders of the corporate bastion to auctioneers charged with getting the best price for the stockholders." The duty is to maximize the value reasonably attainable in the immediate transaction — long-term strategy considerations drop out once the company is being sold.

When does Revlon apply? Paramount Communications, Inc. v. Time Inc., 571 A.2d 1140 (Del. 1990) held it does not apply merely because a company is the subject of a bid, or because it enters a stock-for-stock merger in which control remains in a large, fluid market. Paramount Communications, Inc. v. QVC Network, Inc., 637 A.2d 34 (Del. 1994) held it does apply where the transaction results in a change of control — there, into the hands of a single controlling stockholder — because the stockholders' last opportunity to receive a control premium is at hand.

The working test: Revlon applies to all-cash deals, to transactions delivering control to a single person or group, and to break-ups. It does not apply to stock-for-stock mergers of widely held companies, because the stockholders retain their control premium in the combined entity.

What Revlon actually requires. Not an auction. Barkan v. Amsted Industries, Inc., 567 A.2d 1279 (Del. 1989) made clear there is "no single blueprint." Mills Acquisition Co. v. Macmillan, Inc., 559 A.2d 1261 (Del. 1989) demonstrated what fails: a process manipulated to favor a management-led group, with selective information and a tipped auction. And Lyondell Chemical Co. v. Ryan, 970 A.2d 235 (Del. 2009) held that where directors are exculpated, a Revlon claim requires a showing of bad faith — a "conscious disregard" of known duties, not merely an imperfect process. The Court emphasized that "there is only one Revlon duty — to get the best price for the stockholders at a sale of the company," and that directors who negotiate a substantial premium after an unsolicited approach do not breach it by moving quickly.

C & J Energy Services, Inc. v. City of Miami General Employees' & Sanitation Employees' Retirement Trust, 107 A.3d 1049 (Del. 2014) reinforced the point at the injunction stage, holding that Revlon does not require a pre-signing market check where the board has an informed basis and the deal permits a post-signing check.

Entire fairness

The most demanding standard, applied where the transaction involves a controlling stockholder standing on both sides, or where a majority of the board is interested or lacks independence.

Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983) established the framework: the defendants must prove entire fairness, comprising fair dealing — the timing, initiation, structure, negotiation, disclosure, and approval of the transaction — and fair price — the economic and financial considerations. The Court described these as not bifurcated: "the test for fairness is not a bifurcated one as between fair dealing and price. All aspects of the issue must be examined as a whole."

Kahn v. Lynch Communication Systems, Inc., 638 A.2d 1110 (Del. 1994) held that entire fairness applies to a controller transaction even where an independent special committee negotiates, though a properly functioning committee or a majority-of-the-minority vote shifts the burden of persuasion to the plaintiff. Burden shifting is worth something, but not enough to get a case dismissed.

Why entire fairness is so consequential procedurally: it is a fact-intensive standard that a court will almost never resolve on the pleadings. A complaint that successfully invokes entire fairness has bought years of litigation regardless of the deal's merits.

MFW: buying back the business judgment rule

The most important structural development in controller transactions is the framework of Kahn v. M & F Worldwide Corp., 88 A.3d 635 (Del. 2014).

The holding. In a controller freeze-out merger, the business judgment standard of review applies — not entire fairness — if and only if the transaction is conditioned ab initio on both:

The approval of an independent, adequately empowered special committee that fulfills its duty of care; and
The uncoerced, informed vote of a majority of the minority stockholders.

The Court set out six elements:

(i) the controller conditions the procession of the transaction on the approval of both a Special Committee and a majority of the minority stockholders; (ii) the Special Committee is independent; (iii) the Special Committee is empowered to freely select its own advisors and to say no definitively; (iv) the Special Committee meets its duty of care in negotiating a fair price; (v) the vote of the minority is informed; and (vi) there is no coercion of the minority.

Why "ab initio" is the hardest element in practice. The dual protections must be in place before any substantive economic negotiations begin. A controller who makes an offer, negotiates for six weeks, and then agrees to add a majority-of-the-minority condition has not satisfied MFW. Delaware courts have been unforgiving about this, and it is the element most frequently litigated. The operational rule is simple and absolute: the controller's very first written communication proposing the transaction must contain both conditions.

What "adequately empowered" means. The committee must be able to:

Select and retain its own legal and financial advisors, paid by the company, without controller involvement.
Negotiate freely on price and terms.
Say no, definitively — and the controller must acknowledge in writing that it will not proceed without committee approval and will not pursue a tender offer or other alternative around the committee.
Consider alternatives, including remaining independent, where that is realistic.
Control the process timetable.

What "meets its duty of care" means. The committee must actually negotiate. A committee that meets three times, accepts the controller's first number, and signs is a committee that has satisfied the formal elements and failed the substantive one. Courts look at whether price moved, what information the committee obtained, whether it pushed back, and whether it was prepared to walk.

The payoff is enormous. An MFW-compliant transaction is reviewed under the business judgment rule, which means a complaint challenging it is dismissed at the pleading stage unless the plaintiff pleads particularized facts undermining one of the six elements. That converts a four-year case into a six-month one.

And the failure mode is equally consequential. A transaction that attempts MFW and misses an element gets entire fairness — the same standard it would have had with no protections at all, except that the failed attempt is now part of the narrative.

Corwin cleansing and its limits

A parallel doctrine addresses transactions that are not controller deals.

The rule. Where a transaction not subject to entire fairness is approved by a fully informed, uncoerced vote of a majority of the disinterested stockholders, the business judgment rule applies and the transaction is effectively insulated from post-closing damages claims. The Delaware Supreme Court adopted this in Corwin v. KKR Financial Holdings LLC in 2015, and refined it the following year in Singh v. Attenborough, 137 A.3d 151 (Del. 2016), which clarified that the effect of a cleansing vote is to invoke the business judgment rule irrebuttably, leaving only waste as a theoretical claim.

The four conditions:

A stockholder vote actually occurred. Cleansing does not apply to transactions structured to avoid a vote, and its application to tender offers depends on the structure.
The vote was fully informed. This is where cleansing fails. A material misstatement or omission in the proxy defeats it entirely.
The vote was uncoerced. Structural coercion — a threat that the alternative is worse, or a linkage that makes a "no" vote punitive — defeats cleansing.
The transaction was not subject to entire fairness. Controller deals go through MFW, not Corwin.

Why disclosure became the whole ballgame. After Corwin, plaintiffs' counsel understood that the only reliable route past a motion to dismiss in a non-controller deal is to plead a disclosure deficiency in the proxy. The result was a wave of disclosure-focused litigation, and it means that the single highest-return investment in deal governance is a proxy that discloses everything a reasonable stockholder would want to know.

What must be disclosed. The standard is materiality — a substantial likelihood that a reasonable stockholder would consider the fact important in deciding how to vote. In practice, that means:

The background of the merger in genuine detail: who approached whom, when, what was said, which alternatives were considered and rejected.
The financial advisor's analyses, including the specific inputs — projections, discount rates, comparable companies and transactions, and the ranges each analysis produced.
The projections management provided to the advisor, including any that were later revised, and the reasons for the revisions.
The advisor's conflicts: prior work for the buyer, fee structure, contingent fees, financing relationships, and any interest in the buyer's securities.
Management's interests: retention arrangements, equity acceleration, post-closing roles, and when each was discussed.
The negotiation history on price, including each side's offers and the sequence.

The most common disclosure failures are: omitting the advisor's specific inputs while disclosing conclusions; describing management's post-closing arrangements vaguely or late; and a background section that begins at the point the eventual buyer appeared, omitting earlier approaches from others.

Appraisal after DFC, Dell, and Aruba

Appraisal was, for a period, a substantial threat: dissenting stockholders could demand judicial determination of fair value, and investors organized funds to do it at scale. Three Delaware Supreme Court decisions substantially changed the calculus.

DFC Global Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346 (Del. 2017) reversed a Court of Chancery valuation that had blended three methodologies, and held that where a transaction results from a robust, competitive, arm's-length process, the deal price is strong evidence of fair value. The Court declined to adopt a presumption in favor of deal price — the statute requires the court to consider all relevant factors — but its reasoning pushed hard in that direction.

Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd., 177 A.3d 1 (Del. 2017) went further. The Court of Chancery had found fair value about 28 percent above the deal price, discounting the market evidence because the buyout was a management-led LBO with a limited pre-signing market check. The Supreme Court reversed, emphasizing that Dell's stock traded in an efficient market with wide analyst coverage, that the sale process — while imperfect — had involved a go-shop and multiple bidders, and that the trial court had given insufficient weight to market indicators.

Verition Partners Master Fund Ltd. v. Aruba Networks, Inc., 210 A.3d 128 (Del. 2019) completed the arc, though with a twist. The Court of Chancery, reading Dell and DFC, had used the unaffected market price and arrived at a figure well below the deal price. The Supreme Court reversed and awarded deal price minus synergies, holding that the deal price less the value of synergies expected from the merger is generally the best evidence of the going-concern value of the company to be appraised.

Where this leaves appraisal:

In a deal with a competitive process and an efficient trading market, the deal price (less synergies) is the anchor. Appraisal arbitrage as a strategy has become far less attractive.
In a deal with a flawed process — a controller squeeze-out, a conflicted management buyout with no market check, a company with no analyst coverage or trading liquidity — the court will look elsewhere, and a discounted cash flow analysis may still produce a premium.
Statutory interest matters. Appraisal accrues interest at a statutory rate from the merger date, which in a rising-rate environment can be a meaningful part of the return even where fair value equals deal price.
The prepayment option permits a company to prepay an amount to stop interest accrual on that amount.

The drafting and process lesson: a genuinely competitive process is not only a fiduciary duty answer; it is also an appraisal answer. Deals with real market checks are far less appraisal-exposed than deals without them.

Deal protection measures

Every merger agreement contains provisions designed to keep the deal together. Enhanced scrutiny asks whether they are reasonable in relation to the threat of a topping bid or, in a Revlon context, whether they unduly impede the board's ability to obtain the best price.

The standard package:

No-shop with a fiduciary out. The target may not solicit alternative proposals, but may respond to an unsolicited proposal that the board determines is or could reasonably lead to a superior proposal.
Matching rights. The buyer gets notice of a superior proposal and a period — three to five business days is customary — to match. Repeated matching periods on each amendment should be shorter.
Termination fee. Typically 2 to 4 percent of equity value for a strategic deal. Higher figures require justification; lower figures are common in deals with a go-shop.
Force-the-vote provision. Section 146 of the DGCL permits an agreement requiring the board to submit the merger to a stockholder vote even if it changes its recommendation.
Voting agreements from significant holders, generally capped below a level that would make the outcome a foregone conclusion.

What draws scrutiny:

A termination fee that is preclusive in combination with other measures. Courts look at the package, not each term.
Unlimited matching rights that make a competing bidder's investment in diligence pointless.
Information rights requiring the target to tell the buyer the identity of any competing bidder and the terms of its proposal — these have been criticized as chilling.
Voting agreements plus a force-the-vote provision that together lock up the outcome. Paramount v. QVC invalidated a lock-up combination that effectively foreclosed a superior offer.
A no-shop with no fiduciary out at all, which is close to indefensible in a change-of-control transaction.

Go-shops. A post-signing period during which the target may actively solicit competing proposals, often with a reduced termination fee for a deal signed with a bidder who emerged in the go-shop. Courts have accepted go-shops as substitutes for pre-signing market checks — C & J Energy is the leading example — but the go-shop must be real: enough time, a genuine ability to provide information, and a reduced fee that does not itself deter a topping bid.

The special committee: what makes one work

Where a committee is used — controller transactions, management buyouts, deals with conflicted directors — its constitution and conduct determine the outcome.

Independence is a factual inquiry, not a checkbox. A director may satisfy stock exchange independence standards and still be found not independent for Delaware purposes. Courts examine: business relationships with the controller or its affiliates; social and familial ties; service on other boards controlled by the same person; the significance of director fees to the individual's income; and whether the director owes the controller a debt of gratitude for the position.

Marchand v. Barnhill, 212 A.3d 805 (Del. 2019), though a Caremark case, illustrates the Court's willingness to find a director not independent based on deep, long-standing ties to a controlling family — including a relationship in which the family's patronage was significant to the director's career.

Empowerment must be documented before work begins. The board resolution creating the committee should state that the committee is authorized to:

Retain independent legal and financial advisors of its own choosing, at company expense.
Negotiate the terms of any transaction.
Reject any transaction, and the board will not approve a transaction the committee has not approved.
Consider alternatives, including maintaining the status quo.
Control the timing of the process.

Advisor independence matters as much as director independence. A financial advisor with an existing relationship with the buyer, or with a stake in the financing, is a problem. The committee should ask every prospective advisor for a written conflicts disclosure covering the last three years, including fees earned from the buyer and its affiliates, and should consider retaining a second advisor for the fairness opinion where the primary advisor has any financing role.

The committee must actually negotiate. The record should show price movement, information requests, pushback on terms, and — ideally — at least one point at which the committee declined an offer. A committee that never says no has not demonstrated it could.

Minutes matter. They should record what the committee considered, what advice it received, what alternatives it weighed, and why it decided as it did. They should not be verbatim transcripts, and they should not be so sparse that they prove nothing. More on this below.

A worked sale process

Halverstrom Instruments, a public maker of laboratory analytical equipment, receives an unsolicited all-cash proposal at $42 per share from Pellingham Capital, a private equity firm. The stock has been trading around $31. Two directors have consulting relationships with a Pellingham portfolio company.

The board's first decisions, and why each matters.

One — is this a Revlon transaction? All cash, change of control. Yes. The board's duty is to obtain the best price reasonably available now.

Two — who decides? Two of nine directors have Pellingham-adjacent relationships. The board forms a transaction committee of five clearly independent directors, excludes the two, and documents the exclusion. It also excludes the CEO from committee deliberations after concluding she is likely to be retained by the buyer — a fact she disclosed at the first meeting, which is exactly what should happen.

Three — advisors. The committee interviews three banks. One discloses $18 million in fees from Pellingham portfolio companies over three years and is not retained. A second is retained as lead advisor; a third is engaged separately to deliver the fairness opinion, because the lead advisor may participate in the buyer's financing. Legal counsel is retained by the committee directly.

Four — the market check. The committee decides against a broad pre-signing auction, reasoning that Halverstrom's customer relationships would be damaged by a leak. Instead it contacts eleven parties confidentially — six strategic, five financial — under NDAs without standstills that would prevent them from making a proposal later. Four decline immediately. Three sign NDAs. Two conduct diligence.

Five — the negotiation. Pellingham's $42 becomes $44.50 after the committee produces a five-year management projection showing a new product line the market had not modeled. One of the two other diligence parties bids $43.75 with a financing contingency; the committee uses it. Price closes at $46.25.

Six — deal protections. A no-shop with a fiduciary out; a 3.1 percent termination fee; a four-business-day match right with two business days on amendments; a thirty-five-day go-shop with a 1.75 percent reduced fee for a go-shop bidder; a force-the-vote provision; no voting agreements.

Seven — the proxy. The background section runs eleven pages and names every party contacted. The financial analyses disclose the projections, the discount rate range and how it was derived, the comparable companies and transactions with the multiples for each, and the resulting per-share ranges. Management's retention discussions are disclosed with dates. The lead advisor's financing role and fee structure are disclosed. The excluded directors' relationships are disclosed.

Eight — the vote. Approved by 91 percent of shares voted.

What happens in litigation. Two suits are filed pre-closing alleging disclosure deficiencies; the company issues a supplemental disclosure adding two data points and the plaintiffs withdraw. A post-closing damages case is filed. The defendants move to dismiss on the ground that a fully informed, uncoerced majority vote cleanses the transaction. Granted. Total defense cost: about $1.1 million over eight months.

What would have happened without the process work. If the CEO had run the process; if the excluded directors had participated; if the lead advisor's financing role had gone undisclosed; if the background section had started with Pellingham's offer — any one of these creates a well-pleaded disclosure or loyalty claim, defeats cleansing, and produces a case measured in years.

The arithmetic that matters to a board: the incremental cost of doing this properly — a second fairness opinion, more advisor time, a longer proxy, more committee meetings — was perhaps $2.5 million. The cost of the litigation it avoided was several times that, before counting the directors' time and the disclosure of internal deliberations that discovery would have produced.

Fairness opinions: what they do and do not do

A fairness opinion states that, as of a date and subject to stated assumptions and limitations, the consideration is fair from a financial point of view to the holders of a class of securities.

What it is not. It is not a valuation, not an opinion that the price is the best obtainable, not advice on whether to do the deal, and not a legal conclusion. Boards that treat it as any of those things misuse it.

What it does. It supports the board's reasonable reliance on expert advice — Delaware law expressly protects directors who rely in good faith on reports presented by advisors selected with reasonable care — and it creates a documented record that the board considered financial fairness.

What determines whether it helps in litigation:

Conflicts, disclosed. The advisor's relationships with the buyer, its fee structure, any contingency on closing, any financing role, and any holdings in the parties. Undisclosed advisor conflicts have been the basis of significant fiduciary duty and disclosure claims.

A fee structure the board considered. A wholly contingent fee is standard and defensible; the board should nonetheless consider and document whether a partly fixed fee is appropriate, particularly for a committee's opinion provider.

Projections the board owns. The advisor's analysis runs on management's projections. The board must satisfy itself that the projections are management's best estimates, understand any revisions and why they were made, and disclose them. Projections revised downward shortly before a buyout — a recurring fact pattern — draw intense scrutiny.

Disclosure of inputs, not just conclusions. The single most common disclosure claim is that the proxy gave the advisor's conclusions and per-share ranges without the inputs that produced them. Disclose the discount rate range and its derivation, the terminal growth or exit multiple assumptions, the comparable companies and the specific multiples, and the selected precedent transactions.

A second opinion where the primary advisor is conflicted. It costs money and it removes an argument.

Board minutes: the underrated deliverable

Minutes are the primary contemporaneous evidence of process, and they are read years later by people looking for a problem.

What good minutes contain:

Who attended, including advisors, and who left for which portions.
What materials were distributed and when — the timing matters, because materials delivered at the meeting suggest directors could not have absorbed them.
What advice was given, in substance: the financial advisor presented an analysis showing a range of $X to $Y using Z methodologies; counsel advised on fiduciary duties applicable to a change of control.
What alternatives were considered, including remaining independent and pursuing other counterparties, and why each was or was not pursued.
What questions directors asked. This is the most valuable content and the most often omitted. It demonstrates engagement.
Conflicts disclosed and how they were handled, including recusals with times.
What was decided and on what vote.

What good minutes avoid:

Verbatim transcription. Minutes are not a record of everything said, and drafting them that way creates discovery problems without proving process.
Legal conclusions. "The board determined it had satisfied its Revlon duties" is an argument, not a fact, and it reads as coached.
Sanitized unanimity. A record showing that every decision was unanimous with no discussion is less credible than one showing genuine deliberation, including dissent.
Long gaps. Minutes that skip meetings, or that are drafted months later, are attacked as reconstructions.

Practical mechanics: counsel should draft the minutes within a week, circulate to the chair and advisors for accuracy, and present them for approval at the next meeting. Retain the board books. Preserve the drafts — deleting them looks worse than any content they contain.

Officers, and the exculpation gap

Two points that are easy to miss.

Officers were not exculpated until recently, and the amendment is not automatic. Delaware amended § 102(b)(7) in 2022 to permit charter provisions exculpating certain senior officers from personal liability for duty-of-care claims brought directly by stockholders. The amendment does not cover derivative claims against officers, does not cover loyalty or bad faith, and — importantly — requires a charter amendment approved by stockholders. Many companies have adopted it; many have not. Check before assuming officers are protected.

Officers' conduct is often the actual subject of the case. In a sale process, the CEO and CFO run the projections, manage the data room, field the buyer's approaches, and negotiate their own post-closing arrangements. Claims that an officer steered the process toward a buyer offering retention frequently survive dismissal even where director claims do not — the exculpation gap is real, and Revlon-context officer conduct is where plaintiffs look.

The governance response: disclose management's interests early and in writing; keep management out of committee deliberations where their interests diverge; forbid discussion of post-closing employment until price is substantially agreed, and document when the topic was first raised; and have the committee, not management, control the flow of information to bidders.

What goes wrong most often

The controller who adds MFW conditions late. The most valuable protection in Delaware corporate law is forfeited by a sequencing error. Put both conditions in the first letter.

The proxy that discloses conclusions, not inputs. The default route past a motion to dismiss.

Management's post-closing arrangements discussed too early and disclosed too late. Both halves are avoidable.

A committee that never says no. Formal compliance without substantive negotiation.

A financial advisor with an undisclosed buy-side relationship. Ask for a three-year written conflicts disclosure from every candidate.

Deal protections evaluated one at a time. Courts assess the package.

Minutes that prove nothing. Sparse minutes are as bad as absent ones.

Projections revised on the eve of a buyout. If they must be revised, document why, contemporaneously, and disclose both versions.

A board that learns the standard of review after signing. Counsel should present the applicable standard, and what it requires, at the first substantive board meeting on the transaction — not in the litigation.

A note on non-Delaware entities

Most of what appears above is Delaware law, which governs the majority of large public companies and a great many private ones. Three qualifications.

Other states differ, sometimes materially. Several states have constituency statutes permitting directors to consider non-stockholder interests in a change of control, which softens or displaces the Revlon framework. Others have adopted the Model Business Corporation Act's approach to director liability, which allocates burdens differently. Confirm the state of incorporation before applying Delaware analysis.

LLCs and partnerships are a different world. Delaware's alternative entity statutes permit the elimination of fiduciary duties by contract, subject only to the implied covenant of good faith and fair dealing. In an LLC whose agreement eliminates duties, the analysis is contractual, and Revlon and MFW are irrelevant. Read the operating agreement first; it may answer the question the case law would otherwise ask.

Private company sales raise the same issues with fewer procedural protections. There is no proxy, often no independent directors, and frequently a controlling holder on both sides. The absence of public-company machinery does not eliminate the duties; it eliminates the tools for satisfying them. In a private sale with a conflicted controller, the practical answer is usually a special committee with its own advisors and a genuine minority approval mechanism — the MFW structure, adapted — plus disclosure to the minority holders sufficient to make their consent informed.

The practical summary

Identify the standard of review at the outset. Business judgment, enhanced scrutiny, or entire fairness. Everything else follows from that answer.

In a controller deal, satisfy MFW completely or do not attempt it. Both conditions, in the first communication, with a genuinely empowered committee that negotiates.

In a non-controller deal, protect the cleansing vote. That means a proxy that discloses the process, the analyses, the inputs, the conflicts, and management's interests.

In any change-of-control deal, run a real market check — pre-signing or through a meaningful go-shop — because it answers both the fiduciary question and the appraisal question.

Document as you go. Board resolutions, minutes, advisor engagement letters, conflicts disclosures, and the record of what was considered and rejected. The record is created during the deal and read during the litigation, and nothing added later helps.

And remember what the standard of review is worth. The difference between dismissal on the pleadings and four years of entire fairness litigation is decided by choices made in the first two weeks of a transaction, usually before anyone is thinking about a lawsuit at all.