Disputed stock sale survives “entire fairness” review

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Abstract: The Delaware Chancery Court recently applied the toughest standard of scrutiny — known as “entire fairness” — in a dispute over the control and ownership of a company after the sale of unissued stock to an executive in the business. This article explains how the standard works and how an independent valuation helped the directors prevail in a recent shareholder dispute. A sidebar explains common methods experts use to estimate lost profits in fiduciary breach cases. Coster v. UIP Companies, Inc., No. 2018-0440-KSJM (Del. Ch. Ct. Jan. 28, 2020)