When the Delaware Supreme Court upheld the 2025 amendments to Delaware General Corporation Law Section 144 earlier this year, the practical question became how courts would now apply them. The Court of Chancery has begun to answer that question. In Ayers v. Foley (Del. Ch. June 15, 2026), Vice Chancellor Will issued the first decision interpreting Section 144(d)(2)’s heightened presumption of director disinterestedness. Two subsequent decisions show its immediate impact. 

The Dispute

In Ayers, a stockholder challenged two compensation decisions at Fidelity National Financial: a $50 million equity grant to Fidelity’s founder and non-executive chairman, and three years of annual director compensation that the plaintiff alleged was excessive. The defendants moved to dismiss, invoking the new statutory framework.

The two awards traveled through distinct approval processes. The Compensation Committee approved the annual director pay. The equity grant went through an additional layer of review, however, with the Compensation Committee conditioning its own approval on sign-off from the Related Person Transaction Committee, a separate body of directors not involved in the compensation decisions.

The New Standard

Section 144(d)(2) provides a heightened presumption of disinterestedness for directors of exchange-listed corporations who have been determined by their board to satisfy the applicable criteria and are not parties to the challenged transaction. Ayers held, as a matter of first impression, that the presumption extends beyond Section 144’s statutory safe harbors. It also applies when evaluating director independence for demand-futility purposes under Court of Chancery Rule 23.1.

To overcome the presumption, a plaintiff must plead “specific, non-conclusory facts of sufficient qualitative significance” supporting a reasonable inference that a material interest or relationship would impair the director’s objective judgment.

The plaintiff in Ayers did not meet that standard. Overlapping board seats at affiliated companies, minority co-investments in sports franchises, and aggregated director fees across multiple entities were insufficient without allegations explaining why those relationships were personally material to the directors. As the court emphasized, “volume alone cannot substitute for materiality.” Because the plaintiff could not establish that a majority of the board was conflicted with respect to the equity grant, demand was not excused and those claims were dismissed.

Self-Compensation Remains Different

The annual director compensation at issue produced a different result. Directors who set their own pay are parties to the transaction and inherently interested in it. The court sustained the breach of fiduciary duty claim against the Compensation Committee members who actually approved the annual pay packages, finding the plaintiff adequately alleged both unfair price and, consistent with precedent, satisfied the unfair dealing component for pleading purposes. The court dismissed the fiduciary-duty claim against directors who merely received the compensation without participating in its approval, however.

Early Applications of Ayers

Two later decisions show Ayers at work. In Dodiya v. Franklin (Del. Ch. Aug. 26, 2026), the court applied Section 144(d)(2) when evaluating whether a board had a disinterested majority to invoke Section 144(a)(1)’s safe harbor for a going-private merger. Citing Ayers, the court rejected independence challenges based on stale business relationships, overlapping board service, and customary director compensation. The safe harbor ultimately remained unavailable on other grounds, but the independence analysis tracked Ayers precisely.

In Wisconsin Laborers Pension Fund v. Joshi (Del. Ch. Sept. 16, 2026), the court applied the presumption in analyzing whether alleged conflicts rendered a stockholder vote uninformed for purposes of Corwin. One director had become a senior advisor to an eventual acquirer during the sale process. But the complaint did not allege her compensation, explain why the role was personally material to her, or identify meaningful participation by her in the sale process. 

What It Means

The early cases confirm that Section 144(d)(2) provides meaningful protection for qualifying directors. Board determinations of independence now carry greater statutory weight, and generalized allegations of overlapping directorships, historical business relationships, minority co-investments, or similar professional ties should not overcome the heightened presumption without facts showing that the relationship is material to the particular director. 

The presumption, however, works best alongside a disciplined process. Boards should continue to identify and manage conflicts, document their independence determinations, and satisfy each requirement of the applicable safe harbor. Ayers also confirms that director self-compensation requires particular care. For exchange-listed companies and their counsel, the cases underscore the value of building both a defensible process and a clear contemporaneous record.