Delaware Supreme Court Clarifies MFW Framework
Publications
October 2024
By: Jenner & Block LLP
On April 4, 2024, the Delaware Supreme Court held in In re Match Group Inc., Derivative Litigation that the entire fairness standard of review applies to all controlling stockholder transactions in which a controller receives a non-ratable benefit, unless all of the factors contemplated by Kahn v. M&F Worldwide Corp. (“MFW”) are satisfied. The Court also held that all members of the special committee must be independent to obtain business judgment review under MFW.
In Match, minority stockholders of Match Group, Inc. (“Match Group”) brought suit challenging the fairness of IAC/InterActiveCorp’s (“IAC”) separation from its controlled subsidiary, Match Group. The reverse-spinoff was approved by a separation committee of Match Group and a majority of the minority stockholders. However, despite such approval, the Plaintiffs sued claiming that the transaction was unfair because it left the spun-off company with lesser quality assets than the controller.
On appeal, the Court held that entire fairness standard of review remains the presumptive standard of review in any action challenging a transaction where the controller stands on both sides and receives a non-ratable benefit, and in order for the business judgment review to apply, the defendants will have to satisfy both MFW prongs (the transaction is [1] negotiated by a special independent committee and [2] approved by a fully informed vote of the majority of minority stockholders). However, the Court confirmed that using only one prong of the MFW factors will shift the burden of proving entire fairness to the Plaintiff, but will not alter the standard of review. Finally, the Court confirmed that the MFW framework requires a special committee of a board of directors that consists entirely of independent directors.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
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© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
Publications
October 2024
By: Jenner & Block LLP
On April 4, 2024, the Delaware Supreme Court held in In re Match Group Inc., Derivative Litigation that the entire fairness standard of review applies to all controlling stockholder transactions in which a controller receives a non-ratable benefit, unless all of the factors contemplated by Kahn v. M&F Worldwide Corp. (“MFW”) are satisfied. The Court also held that all members of the special committee must be independent to obtain business judgment review under MFW.
In Match, minority stockholders of Match Group, Inc. (“Match Group”) brought suit challenging the fairness of IAC/InterActiveCorp’s (“IAC”) separation from its controlled subsidiary, Match Group. The reverse-spinoff was approved by a separation committee of Match Group and a majority of the minority stockholders. However, despite such approval, the Plaintiffs sued claiming that the transaction was unfair because it left the spun-off company with lesser quality assets than the controller.
On appeal, the Court held that entire fairness standard of review remains the presumptive standard of review in any action challenging a transaction where the controller stands on both sides and receives a non-ratable benefit, and in order for the business judgment review to apply, the defendants will have to satisfy both MFW prongs (the transaction is [1] negotiated by a special independent committee and [2] approved by a fully informed vote of the majority of minority stockholders). However, the Court confirmed that using only one prong of the MFW factors will shift the burden of proving entire fairness to the Plaintiff, but will not alter the standard of review. Finally, the Court confirmed that the MFW framework requires a special committee of a board of directors that consists entirely of independent directors.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
Related Articles
Related Capabilities
© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
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