## Facts

- Match Group, Inc. (Old Match) was a controlled subsidiary whose public stock included a high-vote class held by IAC/InterActiveCorp (Old IAC), giving IAC voting control.
- Old IAC implemented a 2019 “reverse spinoff” separating its dating business from its other businesses:
  - Non-dating businesses were placed into a new entity (New IAC).
  - Old IAC retained the dating business and certain debt, was renamed Match Group, Inc. (New Match), and Old Match was merged out of existence.
  - Old Match minority stockholders received New Match shares.
- Old Match formed a separation committee (special committee) to evaluate and negotiate the transaction; it retained independent legal and financial advisors and recommended approval.
- The transaction was conditioned on approval by a majority of unaffiliated stockholders, framed as an effort to replicate MFW-style procedural protections.
- Former minority stockholders, suing derivatively, alleged IAC stood on both sides of the transaction and obtained non-ratable benefits by shifting debt and other burdens onto the dating business to the detriment of minority holders.
- Plaintiffs alleged the special committee was not independent, focusing on a member’s substantial prior ties to IAC, and also alleged disclosure deficiencies affecting the minority vote.

## Issues

1. In a controller transaction where the controller stands on both sides and receives a non-ratable benefit, can business judgment review apply absent full compliance with MFW’s dual protections?
2. Whether the separation committee satisfied MFW’s independence requirement, including the rule that all committee members must be independent.
3. If MFW did not apply, whether plaintiffs plausibly stated an entire fairness claim sufficient to survive dismissal.

## Decision

- The Delaware Supreme Court affirmed in part, reversed in part, and remanded.
- Entire fairness is the presumptive standard for controller self-dealing transactions conferring non-ratable benefits; using only one cleansing device (special committee or minority vote) may shift burden but does not change the standard to business judgment.
- To obtain business judgment review, a controller must satisfy all MFW requirements, including both an independent, empowered special committee and an uncoerced, fully informed majority-of-the-minority vote, imposed from the outset.
- The court held defendants failed to show the separation committee was wholly independent; therefore, MFW was not satisfied and business judgment review was unavailable at the pleadings stage.
- Because MFW was unavailable, the transaction remained subject to entire fairness review, and plaintiffs’ pleadings were sufficient to proceed.

## Legal Principles

- When a controlling stockholder stands on both sides of a transaction and receives a non-ratable benefit, entire fairness presumptively applies.
- Employing only one procedural protection (independent committee or minority vote) can shift the burden of proving entire fairness but does not change the standard of review from entire fairness to business judgment.
- Business judgment review in controller transactions requires full MFW compliance, including dual protections established from the outset.
- For MFW, every member of the special committee must be independent; one non-independent member defeats the independence prong.
- Absent MFW cleansing, a complaint survives dismissal by pleading a reasonably conceivable claim that the transaction was not entirely fair.

## Conclusion

The court held that MFW’s dual protections are required to obtain business judgment review for any controlling-stockholder transaction involving non-ratable benefits, and it reinstated the claims for entire fairness review because the special committee was not shown to be fully independent.


In re Match Grp., Inc. Derivative Litig., 315 A.3d 446 (Del. 2024)