Cloudflare’s Request for Delaware Supreme Court Review Remains Pending

Cloudflare’s proposed stock recapitalization remains blocked as the Delaware Supreme Court has yet to decide whether to accept the company’s request to review a preliminary injunction, leaving the plan on hold while stockholder litigation continues. On Nov. 3, Delaware Vice Chancellor J. Travis Laster recommended that the justices take up an interlocutory appeal, which seeks review before a case reaches final judgment. The request raises whether Delaware should keep the Disney standard for director good faith and whether a special committee’s good faith should be judged collectively or director by director. Laster wrote, “Whether to permit an interlocutory appeal lies in the discretion of the Delaware Supreme Court.” The recommendation concerns an Oct. 16 preliminary injunction that bars Cloudflare from implementing the recapitalization while the consolidated stockholder case proceeds.

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