In a case between sibling owners of a close corporation, Plaintiffs brought suit claiming the Defendants caused the corporation to enter into a variety of self-dealing and wasteful transactions. Plaintiffs had been ousted as directors of a subsidiary of the corporation when the Defendants elected themselves to the board. The corporation’s charter contained a provision designed to sterilize director interest when approving self-dealing transactions, but the Court of Chancery held that such provisions only dealt with issues of quorum, and did nothing to sanitize a disloyal transaction. If the Court were to accept Plaintiffs’ interpretation, all interested transactions would be immunized from the entire fairness analysis.
