
Legal “Raincoat” Keeps Directors Dry in Going-Private Deals Outside Delaware
Though Elon Musk’s controversy with Twitter has grabbed the headlines, another going-private legal development also merits attention: Meade v. Christie et al., an Iowa Supreme Court decision dismissing shareholder class action claims against directors who approved a going-private merger. The Meade dismissal was based on a director liability shield patterned on Model Business Corporation Act (“MBCA”) Section 2.02(b)(4). As interpreted and applied in Meade, the MBCA shield is more protective than the comparable Delaware provision, DGCL Section 102(b)(7). Equally important, Meade answers procedural questions that aren’t fully resolved by the MBCA shield text, illustrating key pleading requirements for … Read more