Barking without Biting: How Corwin Did Not Change M&A

This paper explores the impact of two Delaware Supreme Court cases, C&J Energy (2014) and especially Corwin (2015), on transactional merger practice. The Corwin decision, which replaced the enhanced scrutiny for directors of target companies imposed by Revlon with the less demanding business judgment rule when a transaction is approved by a fully informed, uncoerced vote of the disinterested stockholders, has been criticized by some legal scholars for de facto limiting directors' fiduciary duties by reducing the ability of plaintiffs to pursue monetary claims against boards of directors in M&A transactions. The paper analyzes the impact of these court decisions on M&A contracting practices, including the size of lock-ups and target termination fees, pre-signing market checks, and go-shop provisions. The study analyzes all domestic public deals in the 2010-18 period for a contestable domestic target with an equity value of at least $100 million and found only a limited impact on M&A contracting practices and returns for investors.