The Delaware Supreme Court on Wednesday sealed the fate of a high-stakes corporate fight, affirming the dismissal of a stockholder lawsuit that sought to derail the $10.5 billion take-private deal for Zendesk Inc. The ruling closes a long-running challenge to one of the most contested software buyouts in recent years.
In a terse two-sentence order, Chief Justice Collins J. Seitz Jr. and Justices Abigail M. LeGrow and N. Christopher Griffiths upheld Vice Chancellor J. Travis Laster’s earlier ruling. Laster had tossed the case in January from the bench, finding that Zendesk stockholders were provided all material information necessary to cast an informed vote on the November 2022 transaction.
The Corwin Shield
Laster’s decision placed the deal squarely under the protective umbrella of the state’s landmark 2015 Corwin v. KKR Financial Holdings Inc. precedent. That ruling grants directors business judgment deference when corporate actions are approved by a fully informed, uncoerced majority of disinterested shareholders.
In Zendesk’s case, the court concluded that the company’s disclosures “cleansed” the process, putting it into what Laster described as “an irrebuttable business judgment rule world.”
