The stake
If you run sale processes, the useful question is not whether Delaware has moved. It is which documents you control that will be read back to you.
Two Court of Chancery decisions this year reached the same claim against a sell-side bank and came out opposite ways. Neither turned on the fairness opinion. Neither turned on the 2025 amendments. Both turned on what the contemporaneous record showed about how the process was run and what the board was told — which is to say, both turned on artifacts a banker creates, in the ordinary course, months before anyone files anything.
That is a better piece of news than it sounds. It means the defense is built in the same place the work is done, on the same calendar, mostly at no incremental cost. It also means the defense is built — or lost — long before counsel is involved.
What the cases establish
Goldman Sachs stays in the case
| Matter | In re EngageSmart, Inc. Stockholder Litigation, C.A. No. 2023-1093-JTL (Del. Ch. Feb. 27, 2026) (Laster, V.C.)1 |
|---|---|
| Transaction | Vista Equity Partners’ $4 billion take-private of EngageSmart at $23 per share |
| Structure | General Atlantic, the controller, rolled over for a 35% stake and received a $500 million post-closing dividend the opinion describes as undisclosed |
| Ruling | Aiding-and-abetting claim against the financial adviser sustained; the matching claim against the favored buyer dismissed |
The defendants argued the proxy owed stockholders less detail about the bank’s conflicts because Goldman was the company’s adviser rather than the committee’s, and because Goldman did not render a fairness opinion. The court rejected it in two lines:
One boundary, routinely lost in summary. The process claim was sustained outright. The complaint’s separate theory — that the bank aided and abetted a disclosure breach — also survived, but differently: the court deferred ruling on it under Court of Chancery Rule 12(i), and Goldman’s motion to dismiss that aspect was denied. Both theories are past the pleading stage; only one has a substantive ruling.2 Anyone citing this case for the proposition that a banker can be liable for a bad proxy is citing a ruling the court has not made.
Morgan Stanley gets out
| Matter | Berger v. Fox, C.A. No. 2025-1183-BWD (Del. Ch. July 24, 2026) (David, V.C.)3 |
|---|---|
| Transaction | Bain Capital’s all-cash take-private of Envestnet, Inc. at $63.15 per share, closed November 2024 |
| Ruling | Dismissed on two independent grounds — stockholder cleansing, and failure to plead the adviser’s conduct |
The first ground is the vote: a fully informed, uncoerced vote of disinterested stockholders cleansed the transaction, and cleansing disposed of the whole complaint, the bank included.4 The second ground is the one to keep:
Read as an operating standard rather than a pleading standard, that sentence describes a process: inside the mandate, on the board’s direction, nothing withheld from the people who have to approve it. The court also declined to treat the directors’ exculpation as ending the claim against their adviser — it preserved the route through an exculpated care breach, then dismissed because none was pleaded.5 The protection the directors bought does not extend down the table to you.
The label problem
Most sell-side conflict management is built around the fairness opinion: who signs it, whether the committee retained its own adviser, how the fee is structured against delivery. That architecture answers a question neither of these cases asked.
The court did not ask what the bank was called. It asked what the bank did.
Both halves of the Goldman argument were true. The bank was the company’s adviser, and it did not render an opinion. Neither mattered, because it was running the sale.
And here is the part worth being honest about, because it is a structural feature of how deals get staffed rather than anyone’s bad intent. The bank is engaged by the company. A special committee forms later, often after outreach has begun. The committee frequently does not retain its own adviser — the incremental fee is real, the timeline is compressed, and the existing bank already knows the file. So the bank keeps running the process while the committee supervises it. That is a common posture, it is usually defensible, and it is also precisely the posture in which the label argument gets made and fails.
If a committee forms mid-process, there are three honest options and a board should be asked to pick one on the record: re-paper the existing bank to the committee; leave the bank with the company and retain a second adviser for the opinion on a fixed fee; or leave the structure alone and document why. The wrong answer is the one that happens by default — nobody decides, and the relationship gets characterized eighteen months later by someone with a different objective.
The process record, phase by phase
| Phase | The artifact you already create | What the record has to show |
|---|---|---|
| Kickoff | Engagement letter and relationship disclosure | Who the bank works for, stated once and unambiguously, and what happens to that answer if a committee forms. The relationship schedule opened now rather than assembled during proxy drafting. |
| Committee formation | Board and committee minutes | That the board considered the adviser structure and chose one of the three options, with a reason. Silence here is the gap the label argument falls into. |
| Fee agreement | Engagement letter economics | That the board saw the fee structure, understood the contingency, and priced it. A contingent success fee is normal and defensible — but only where the record shows the board chose it rather than inherited it. |
| Outreach | Buyer list, contact log, process letter | Who was contacted, when, by whom, and why the list was drawn where it was. Same process letter, same instructions, same deadlines to every participant, with the distribution logged. |
| Diligence | Data room access reports | That no bidder had earlier or broader access than the process letter provided. Modern rooms log every view by user; run the access-differential report yourself at final bids, because opposing counsel will run it later. |
| Structure | Sources and uses; post-closing distribution waterfall | Any payment that reaches a rolling or continuing holder on different terms from the minority — flagged to the board in writing, with the question of proxy disclosure asked explicitly and answered. |
| Final bids | Board presentation materials | Alternatives considered including no deal, the breadth of outreach, how price moved and why. This sequence — not the opinion — is the document that carries the process story. |
| Approval | Fairness materials and board minutes | What the board was told, by whom, and what it asked. Minutes that record questions are worth more than minutes that record conclusions. |
| Proxy drafting | Adviser conflicts disclosure | The relationship schedule as maintained from kickoff, not reconstructed from a conflicts database in week eleven. The bank does not sign the proxy — but a fully informed vote is what ended one of these two cases. |
Four of those nine are the ones I would fix first, because they are the ones most often done late or not at all: the relationship schedule opened at kickoff, the committee-structure decision recorded, the differential-payment flag raised in writing, and the access-differential report run before final bids rather than in discovery.
Almost nothing here is new work. It is the same work, timestamped. The difference between a defensible record and an expensive one is usually the calendar, not the effort.
What the discipline costs
A note that only lists precautions is not written by anyone who has run a process. Every item above has a price, and a board deserves to hear it before it is asked to approve one.
Breadth costs confidentiality. A wider outreach makes a better record and raises leak risk. Leaks move employees, customers, and sometimes the price — against you.
Documentation costs speed. Recording the committee-structure decision properly can cost a board meeting. In a competitive situation with a bidder pushing for exclusivity, a week is not free.
A second adviser costs money and can cost momentum. A fixed-fee opinion from an independent bank buys a cleaner record and adds a party who must be brought up the curve at the worst moment in the calendar.
And the one nobody says out loud: a preemptive bidder who is told the process will be long, broad, and heavily papered sometimes declines to preempt. You may trade a certain premium today for a defensible process and a market check. That can be the right trade. It should be a decision, made by the board, with the trade named.
What these two cases change is the price on one side of that ledger, not the shape of it.
For the company and the board
If you are the general counsel or a director rather than the banker, the leverage is at kickoff, and it is contractual. Five things to ask for, none of which a good bank will resist:
- Name the client in the engagement letter, and address the committee case. “If a special committee is formed, the parties will document whether this engagement is assigned to it.” One sentence, at signing, closes the gap that cost a year of motion practice.
- Require the relationship schedule as a running deliverable. Updated at each phase gate, not compiled for the proxy. You are the party who has to be fully informed; ask to be informed on a schedule.
- Ask for the data-room access-differential report at final bids. It exists, it takes minutes to produce, and it either confirms an even process or tells you something you need to know while you can still fix it.
- Ask what in the structure pays a continuing holder differently. Ask it of the banker, in the room, and record the answer. The model shows this before the disclosure lawyers do.
- Price the fee structure on the record. Not to change it — contingency aligns interests and everyone knows it. To show that the board looked at it and chose.
Directors sometimes hesitate to ask an adviser about the adviser’s own conflicts. It is worth saying plainly: that conversation protects the bank as much as the board. The bank that got out of the Envestnet case got out partly because nobody could allege it had gone around the board. That is a record two parties build together.
The market read
The narrative is that Delaware’s 2025 amendments redirected the plaintiffs’ bar toward the banks: harder to sue directors and officers in insider deals, no equivalent protection for advisers, so the adviser becomes the defendant still standing.6 As a description of incentives that is coherent, and it is probably directionally right.
As a description of these two cases, it is not established. Neither opinion mentions Senate Bill 21. Neither mentions the amended conflicted-transaction provision. Both were decided on ordinary fiduciary and pleading grounds, and both transactions predate the amendments — the EngageSmart action was filed in 2023 and the Envestnet merger closed in November 2024.
So the thesis is untested rather than proven, and the tests are already on the docket in the pending adviser suits over the Snap One and Couchbase transactions. A third is instructive for a different reason: on the Skechers buyout, the only complaint that named a bank did not survive the lead-plaintiff contest, so that claim will not be tested at all.6 Anyone pricing this into a mandate today is pricing a trend with two data points pointing in opposite directions.
If the deal sits in Texas
Increasingly the question is not only how a claim would be decided but where it would be filed, and here the jurisdictions are not symmetrical at the threshold.
Delaware has a named cause of action whose elements a court has now applied to a sell-side adviser twice in one year. Texas does not. Whether Texas recognizes aiding and abetting a fiduciary breach at all is a question the Texas Supreme Court has expressly left open, most recently in 2017, after declining narrower versions in 1996, 2001 and 2010; several courts of appeals have said the claim does not exist.7 What Texas has had since 1942 is the neighboring rule: a third party who knowingly participates in a fiduciary’s breach becomes a joint tortfeasor.8 The 2025 Texas governance package runs the other way — its good-faith presumptions cover directors and officers of covered corporations and say nothing about outside advisers.9
The practical translation is short. In Delaware you face a claim whose perimeter two courts have just mapped. In Texas you face a differently named claim with a longer pedigree and no modern application to a merger adviser anyone can point to. That is not a ranking of which venue is safer. It is a choice between a mapped risk and an unmapped one — and the process record above is the answer to both, because it is the one input that does not depend on which cause of action gets pleaded.
Sources and notes
The protocol, the cost analysis, and the practitioner conclusions in this note are Shane Goodwin’s professional judgment, drawn from sell-side practice; they are not holdings and no court has prescribed them. The sources below support the legal and factual propositions only. Nothing here is legal advice, and nothing here predicts the outcome of a pending matter.
- Signed opinionIn re EngageSmart, Inc. Stockholder Litigation, C.A. No. 2023-1093-JTL (Del. Ch. Feb. 27, 2026) (Laster, V.C.), Opinion Regarding Motions to Dismiss — signed opinion. Quotations reproduced here were verified verbatim against the signed opinion by The Hilltop Docket, No. 16 (Aug. 31, 2026). No PDF page anchor is printed for either quotation: independent reads of that file disagree on its pagination, so the anchor is withheld rather than guessed. The first quotation appears in the opinion’s introductory summary of holdings, immediately before Part I; the second sits in the disclosure analysis under the sub-heading “i. Goldman” (the parallel “ii.” sub-heading treats Evercore).
- Procedural postureOn the disclosure-based aiding-and-abetting theory the opinion states that “the court defers ruling on that issue under Rule 12(i)” and that Goldman’s motion to dismiss that aspect of the complaint “is denied under Rule 12(i).” The motion was therefore denied and the substantive ruling deferred. Page anchor withheld: the portion of the file carrying this passage could not be paginated with confidence.
- Signed opinionBerger v. Fox, C.A. No. 2025-1183-BWD (Del. Ch. July 24, 2026) (David, V.C.), Memorandum Opinion Granting Motions to Dismiss (56 pp.) — signed opinion. The opinion is captioned Berger v. Fox; the consolidated caption does not appear on the face of the document.
- Holding“A dismissal under Corwin disposes of the entire Complaint, including the aiding and abetting claim asserted against Morgan Stanley.” Berger v. Fox, p. 36 n.12 (PDF p. 38). Dismissal of the count at p. 55 (PDF p. 57); the pleading-failure passage quoted above at p. 53 (PDF p. 55).
- DoctrineThe route through an exculpated breach of the duty of care follows RBC Capital Markets, LLC v. Jervis, 129 A.3d 816 (Del. 2015), pin-cited in Berger v. Fox at 862.
- ReportingSabrina Willmer, “JPMorgan, Morgan Stanley Fight Suits Over Role in Buyout Deals,” Aug. 25, 2026 (as reprinted by Claims Journal), reporting the incentive thesis, the pending Snap One and Couchbase matters, and the Skechers lead-plaintiff outcome. Reporting, not a holding.
- Open questionFirst United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 224 (Tex. 2017) (“this Court has not expressly decided whether Texas recognizes a cause of action for aiding and abetting”); earlier reservations in Juhl v. Airington, 936 S.W.2d 640, 643 (Tex. 1996), Ernst & Young, L.L.P. v. Pacific Mut. Life Ins. Co., 51 S.W.3d 573, 583 n.7 (Tex. 2001), and Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913, 930 n.28 (Tex. 2010). Intermediate appellate authority to the contrary includes Hampton v. Equity Trust Co., 607 S.W.3d 1 (Tex. App.—Austin 2020, pet. denied).
- Settled ruleKinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509, 514 (Tex. 1942): “where a third party knowingly participates in the breach of duty of a fiduciary, such third party becomes a joint tort-feasor with the fiduciary and is liable as such.”
- StatuteTex. Bus. Orgs. Code § 21.419, added by S.B. 29 (89th Leg., 2025), supplies good-faith presumptions for directors and officers and reaches only a corporation with voting shares listed on a national securities exchange or one that has elected into the section. It does not address outside advisers.
- Related coverageThe two Chancery opinions treated here were also covered, from a doctrinal rather than a practitioner perspective, in The Hilltop Docket, No. 16 (SMU Corporate Governance Initiative, Aug. 31, 2026), which this note relies on for the verbatim verification of the quotations above. The Hilltop Docket is an SMU CGI publication and is independent of S. Goodwin & Co. LLC.
Article disclosure
No engagement, current or prior, in the matters discussed. Shane Goodwin has not been retained, engaged, or otherwise involved as an expert, adviser, or director in either transaction or in any proceeding arising from them, for any party. This note is built entirely from the signed opinions and public filings cited below; it rests on no nonpublic information.
Prior relationship disclosed. Shane Goodwin is a former employee of Goldman Sachs, one of the financial advisers discussed here. That employment ended before the transactions described, and he had no role in either sale process.
The process protocol and cost analysis are professional judgment drawn from sell-side practice, not legal advice and not a standard any court has adopted. See the publication method and conflicts policy. Corrections or source questions may be sent to shane@sgoodwinco.com.