In re KKR Financial Holdings LLC Shareholder Litigation

OPINION

BOUCHARD, C.

I. INTRODUCTION

This action involves the novel claim that a holder of less than one percent of the stock of a Delaware corporation was a controlling stockholder and thus owed fiduciary obligations to the other stockholders of the corporation.

In April 2004, KKR & Co. L.P. (“KKR”) acquired KKR Financial Holdings LLC (“KFN”) in a stock-for-stock merger involving two widely-held, publicly-traded companies. Seeking to overcome the presumption that business judgment review would apply to such a transaction, plaintiffs argue that entire fairness should apply because KKR was a…