The Delaware Court of Chancery has allowed a former Saba Software Inc. stockholder to proceed with claims that the company rushed into a conflicted sale amid a regulatory crackdown, finding the director defendants were not entitled to the business-judgment deference, even though investors voted to approve the deal.
The ruling, issued March 31, was a rare instance where the court found that the plaintiff had cleared the initial hurdle of showing that the shareholder vote was neither fully informed nor uncoerced. Typically, corporate defendants receive the benefit of the doubt in such instances, under the Delaware Supreme Court’s 2015 opinion in Corwin v. KKR Financial Holdings.
