Are Sales of a Control Block a Controlling Shareholder Transaction Under DGCL § 144, as Amended by SB 21?

A hypothetical

Consider the following hypothetical loosely based on the corporate classic Perlman v. Feldmann.

Paulsen owns 35% of the stock of Liberty, Inc., a Delaware corporation. Paulsen is the largest shareholder and is the company’s CEO, which gives him the power to exercise managerial control over the company. Paulsen sells all of his stock to Miranda at a premium above the market price. The other shareholders do not have an opportunity to participate. Is this transaction a controlling shareholder covered by § 144 of the DGCL?

DGCL § 144(e)(3) states that: “Controlling stockholder transaction means an act or transaction between the corporation or 1 or more of its subsidiaries, on the 1 hand, and a controlling stockholder or a control group, on the other hand, or an act or transaction from which a controlling stockholder or a control group receives a financial or other benefit not shared with the corporation’s stockholders generally.”

Notice that the phrase “receives a financial or other benefit” is not modified by a phrase such as “from the corporation.” Does this imply that a sale of a control block to a third party is captured by the definition?

To be sure, if a sale of a control block is captured by the statute, that may not be a big deal, as the seller likely can get disinterested director approval to cleanse the transaction. But wouldn’t it seem odd that a statute designed to reduce the scope of controller duties would expand it in this regard?