Failure to Disclose 'Intrinsic Value' Precludes 'Corwin' Defense—But Does Not Necessarily Suggest a Breach of the Duty of Loyalty

Although the failure to disclose such "intrinsic value" prevented dismissal under Corwin v. KKR Financial Holdings, Vice Chancellor Sam Glasscock III held that, in the circumstances, omission and the directors' approval of the sale did not suffice to plead a breach of the directors' fiduciary duty of loyalty.

September 16, 2020 at 11:30 AM

8 minute read

K. Tyler O'Connell

In In re USG Corporation Shareholder Litigation, (Del. Ch. Aug. 31, 2020), the Delaware Court of Chancery granted the director-defendants' motions to dismiss post-closing money damages claims arising out of the sale of USG Corp. (USG) for less than what USG's directors allegedly thought was its intrinsic value. Although the failure to disclose such "intrinsic value" prevented dismissal under Corwin v. KKR Financial Holdings, 125 A.3d 304 (Del. 2015), Vice Chancellor Sam Glasscock III held that, in the circumstances, omission and the directors' approval of the sale did not suffice to plead a breach of the directors' fiduciary duty of loyalty.