Chancery lets Whole Earth Brands merger claims proceed despite new safe harbors

In Dodiya v. Franklin, a challenge to the Whole Earth Brands merger, the Delaware Court of Chancery held that the safe harbors in amended Section 144 of the Delaware General Corporation Law were unavailable at the pleading stage because the complaint supported inferences of board gross negligence and an uninformed stockholder vote. The court allowed fiduciary duty claims to proceed against former chief executive Michael Franklin and executive chairman Irwin Simon.

Why it matters. The statutory safe harbors added in 2025 may not end merger litigation at the motion-to-dismiss stage when their conditions are disputed.