Delaware Supreme Court Reverses Chancery Court, Applies Business Judgment Rule in TripAdvisor Redomestication Case

By Ilan Katz, Matthew Gruenberg, Ira Kotel, Kenneth J. Pfaehler and Christina Austria

On February 4, 2025, the Delaware Supreme Court reversed the Court of Chancery’s decision in Maffei v. Palkon, ruling that TripAdvisor’s change of corporate domicile from Delaware to Nevada should be reviewed under the business judgement rule, rather than under the entire fairness standard. While acknowledging that Nevada and Delaware have different bodies of corporate law and it is possible that some aspects of Nevada’s corporate governance regime may be more favorable to boards of directors and controlling stockholders (and thus less favorable to minority stockholders) than Delaware’s, the Supreme Court held that “the hypothetical contingent impact of Nevada law on unspecified corporate actions that may or may not occur in the future is too speculative to constitute a material, non-ratable benefit triggering entire fairness review.”

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