Court of Chancery Dismisses Claims Against Special Committee Directors in ProFrac Holding Corp. Merger

January 31, 2025

The Delaware Court of Chancery has dismissed a lawsuit by former stockholders of U.S. Well Services, Inc. challenging the fairness of that company’s merger with ProFrac Holding Corp. Prickett, Jones & Elliott, PA represents the three director defendants who constituted a Special Committee of the company’s board that was formed to evaluate the transaction. In a 56-page opinion, Vice Chancellor Bonnie David ruled that the plaintiffs failed to establish that a purported control group of large stockholders had caused the company to approve the transaction, or that a majority of the company’s nine-member board of directors was interested in, or lacked independence, with respect to the merger.

Specifically rejecting the plaintiffs’ claims that the board’s creation of the Special Committee was a concession that a control group dominated the board, the Court observed that the formation of the Special Committee is “evidence of sound corporate governance” rather than control. Because the plaintiffs failed to meet the high bar of pleading that the director defendants acted in bad faith, the Court ruled that the complaint must be dismissed. The Court’s opinion is Turnbull v. Klein, 2025 WL 353877 (Del. Ch. Jan. 31, 2025).

Prickett Jones Director J. Clayton Athey and Associate Seth T. Ford represented the Special Committee defendants.