The appellate court's short opinion affirms that the business judgment rule applies under New York law to a transaction in which a controlling shareholder proposes to take the target company private, as long as the controlling shareholder does not participate in the board's decision to approve the merger and the proposal is conditioned on:
The approval of a special committee of independent directors.
The approval of a majority of the shareholders not affiliated with the controlling shareholder.
As with the lower court's decision, the appellate court does not explicitly reference the Delaware judiciary's decisions in MFW or M & F Worldwide for support of its analysis. At the same time, the court does approvingly cite Delaware law for the principle that board members do not lose the presumption of independence just because they are elected to the board by the controlling shareholder (see Aronson v. Lewis, 473 A.2d 805, 816 (Del. 1984)).