The Delaware Court of Chancery has dismissed a shareholder challenge to Earthstone Energy Inc.’s $325 million acquisition of a Texas oil and gas firm in 2016, finding that the deal met business-judgment protections for a conflicted transaction.

Earthstone investor Nicholas Olenik alleged last year that the deal with Bold Energy III, which expanded Earthstone’s position in the high-producing drilling fields of West Texas, was a gift to the company’s controlling stockholder and a waste of company assets.