Chancellor Kathaleen St. J. McCormick denied every motion to dismiss in a controlling stockholder take private on August 12, because the controller did not commit to the minority protections until after price negotiations were already underway. The special committee members and the chief financial officer are now personally in the case. Treat those protections as a precondition to talking, not as a term to be traded.
PRIORITY 9 | SILO: JUDICIAL
Chancery held that a controller who waits a month to accept minority protections loses the business judgment rule, and that the independent directors and the officer alongside him forfeited their own liability shields by never raising them.
The Signal
On August 12, 2026, in In re Via Renewables, Inc. Merger Litigation, Consolidated C.A. No. 2024-0762-KSJM, the Delaware Court of Chancery denied the motions to dismiss filed by the controlling stockholder, by the three special committee directors, and by the company’s chief financial officer. All three counts survive, and the case proceeds to discovery under entire fairness.
Founder and controller William K. Maxwell III took Via Renewables private in October 2024 at $11 per share. A special committee was formed, it retained its own advisors, and the deal cleared a majority of the minority vote. On paper the transaction looked cleansed. The 2025 amendments to Section 144 took effect February 17, 2025 and do not reach it. The dates say the rest.
The Evidence
Maxwell proposed a take private in September 2023 at $10.50 per share with no minority protections attached. The committee asked for them. He withdrew the offer, arranged financing, and returned on November 15 at $9 per share, stating only that he anticipated a special committee and intended to require a majority of the minority vote. He did not accept both conditions until December 15. By then the parties had negotiated price, the go shop period, and his right to pledge stock as collateral, and the committee had counteroffered at $12.65. The Court found it reasonably conceivable that the deal had moved past germination and “onto economic horse trading” before the controller disabled himself, which under Flood v. Synutra defeats business judgment review at the pleading stage.
Two further findings should concern directors more than the timing holding. The committee members rested their entire defense on the cleansing argument. They never invoked their exculpatory charter provision and never argued In re Cornerstone Therapeutics, which requires a plaintiff to plead a non exculpated claim against an independent director. The Court held both arguments waived for not being briefed. Chief financial officer Miguel Barajas did not raise officer exculpation under Section 102(b)(7) either, and the Court found reckless indifference reasonably conceivable where he prepared lower projections in December, presented them without a recorded committee approval, then told the committee’s financial advisor to use them for the fairness opinion two days later.
The Strategic Implication
The committee treated its own protection as something the controller could grant or withhold. It requested the condition, its counsel flagged the condition as unresolved, and it negotiated price anyway while the answer stayed open. That is the Governance Boundary Principle failing at the deal table. A protection the board has to ask for is not a boundary the board owns, and Chancery settles which one it was by reading the dates. It is also the Declarative Board Failure Pattern in transaction form. A declared protection appears in the proxy statement. A built one appears in the calendar, before the first number is discussed.
Defensive Risk. The exposed parties are special committee chairs and members at companies with a controlling stockholder, and chief financial officers who prepare or revise the projections feeding a fairness opinion. Two things break. Entire fairness replaces business judgment at the pleading stage, and the Section 102(b)(7) exculpation and Cornerstone protections are lost through waiver when counsel briefs only the cleansing argument. A defense that exists and is never pleaded is worth nothing, and it consumes the D and O tower through discovery in a case that should have ended on the papers. Two windows are closing: any controller proposal sitting with a committee today, and any pre February 2025 deal whose dismissal briefing schedule is not yet set. Instruct deal counsel to plead the exculpatory charter provision and Cornerstone in every opening brief as a standing rule, and to hold the controller’s signed, dated commitment before price is discussed.
Offensive Advantage. A committee that will not discuss price until the controller’s written commitment is executed and dated buys a pleading stage dismissal that peers will spend three years of discovery failing to reach. The mechanism is calendar discipline, not negotiating strength, and it costs nothing. The decision also hands boards a control on the management side: require committee approval by recorded vote for any revision to the projections feeding a fairness opinion, before the financial advisor receives them. That one rule removes the fact that put Via’s chief financial officer in this case. Most boards will read this opinion as a controller problem. It is a sequencing problem.
Via’s committee members are defending conduct that happened before they had any protection at all. What a successor committee inherits is not a charter provision but a habit: whether the directors before them held the line before the first number was discussed, or negotiated first and asked for cover later. Build that habit while no controller is at the table, not in response to a complaint already filed.
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