Corporate Alert: Delaware Chancery Court Refused to Enforce Post-Closing General Release and Indemnification Against Non-Consenting Stockholders in a Merger

Summary: The Delaware Court of Chancery recently held that in a statutory merger: (i) the buyer could not condition payment of merger consideration to non-consenting stockholders on their execution and delivery of a broad release of claims when the release was not an express condition contained in the merger agreement, without independent consideration for the release; and (ii) the post-closing indemnification obligations that had indefinite duration, and that potentially covered the full merger consideration, were unenforceable against non-consenting stockholders because such provisions would render the value of the merger consideration unknowable.