Delaware corporations contemplating conversion to another state should take note of the Delaware Supreme Court’s recent decision in Maffei, et al. v. Palkon, et al., in which the court ruled that Tripadvisor’s decision to reincorporate in Nevada was subject to business judgment review because no existing or threatened litigation was alleged.
On February 4, 2025, the Delaware Supreme Court reversed the decision of Vice Chancellor J. Travis Laster of the Delaware Court of Chancery that entire fairness review applied to the Tripadvisor board’s decision to approve corporate conversions to Nevada for Tripadvisor and Liberty TripAdvisor Holdings (Liberty). The court held that the business judgment rule was the applicable standard of review because no member of the board, including the alleged controller, received a material non-ratable benefit from the conversions.
