New York Adopts Delaware Standards of Review for Going-Private Mergers by Controlling Shareholders

New York’s highest court, in an opinion1 issued yesterday, adopted as New York law the test established by the Delaware Supreme Court in Kahn v. M&F Worldwide Corp. (“MFW”)2 for applying the business judgment rule to the review of going-private transactions by controlling shareholders. This important decision clarifies the standards applicable to directors of New York corporations in such transactions and promotes the use of the protective majority-of-the-minority vote mechanism.