Weinberger v. UOP, Inc
In Weinberger v. UOP, Inc., 457 A.2d 701, 715 (Del. 1983), the Supreme Court of Delaware discarded the business purpose requirement, stating that "we do not believe that any additional meaningful protection is afforded minority shareholders by the business purpose requirement."
In Weinberger, the court stated that a suit challenging a cash-out merger must allege specific acts of fraud, misrepresentation, or other forms of misconduct to demonstrate unfairness of the merger terms to the minority. Id. at 703.
The court explained that the concept had two basic aspects, fair dealing and fair price. Id. at 711.
Fair dealing addresses (1) when, (2) how it was initiated, (3) how it was structured, and (4) how it was disclosed whereas fair price stresses (1) economic and (2) financial considerations. Id.
"All aspects of the issue must be examined as a whole since the question is one of entire fairness." Id. With respect to price, the Court held that the appraisal remedy applies but recognized that it may not be adequate in the case of fraud, misrepresentation, self-dealing, deliberate waste of corporate assets, or gross over-reaching. Id. at 714.
The Court concluded that, given the fairness test, the availability of the appraisal remedy and the ability of a court to fashion relief from the facts of a given case, it saw no need for the business purpose rule. Id. at 715.