The plaintiffs argued that the board's decisions to conduct a limited market check, rather than holding a public auction, and to only contact strategic bidders were breaches of the board's Revlon duties and necessarily made in bad faith. On this issue, the court noted its ruling from 2000 that a board may reasonably prefer "a discreet approach relying upon targeted marketing by an investment bank" over a public auction (McMillan v. Intercargo Corp., 768 A.2d 492, 505 (Del. Ch. 2000)). Moreover, recent decisions demonstrate that the board has leeway in choosing which potential buyers to target. In 2011, the court ruled that a board made a reasonable judgment to pursue communications with three companies and gather information on a fourth, from a list of 11 potential bidders, without conducting a public auction (In re Atheros Commc'ns, Inc., C.A. No. 6124–VCN, , at *7 (Del. Ch. Mar. 4, 2011)). For a summary of the court's ruling in Atheros, see Article, Structuring a Sale of Control Transaction: Factors to Consider. Similarly, a board's initial decision to market itself only to financial buyers was deemed not "so far beyond the bounds of reasonable judgment that it seems essentially inexplicable on any grounds other than bad faith" (Miramar Firefighters Pension Fund v. AboveNet, Inc., C.A. No. 7376–VCN, , at *7 n.62 (Del. Ch. July 31, 2013)).

Applying this precedent here, the court held that the plaintiffs' allegation did not rise to the level of bad faith because the board did not consciously disregard its fiduciary duties, even if its efforts could have been more robust.

The court cited two 2013 decisions for the principle that a plaintiff's inability to explain a board's motivation to act in bad faith can be relevant for analyzing a bad-faith claim. In Morton's, the court stated that a complaint failed because it did not "plead any rational motive for the directors to do anything other than attempt to maximize the sale value of Morton's" (In re Morton's Rest. Gp., Inc. S'holders Litig., 74 A.3d 656, 662 (Del. Ch. 2013)). And in AboveNet, the court emphasized that the plaintiff had provided no reason for why the disinterested and independent AboveNet directors would have engaged in the alleged scheme (see AboveNet, at *7).

In Answers, the court similarly held that the plaintiffs had failed to explain persuasively why the independent members of the board would have favored AFCV or preferred the interests of the three allegedly conflicted directors to the interests of the company and its shareholders. By contrast, the defendants were able to supply evidence to the effect that the four directors believed the transaction was fair and that they would not have recommended the transaction had they believed it was unfair to the shareholders.

The plaintiffs argued that the board failed to respond appropriately to the news of the company's strong fourth quarter and wrongly rushed the deal rather than pursue strategic alternatives. To support this claim, the plaintiffs pointed to e-mails from the company's lead advisor at UBS that emphasized that time was of the essence and that considered whether the company should hide its financial strength from the public while finalizing the deal.

The court held that these e-mails did not create a genuine issue of material fact. The court took note of the balancing act that the board had to conduct in weighing the available deal against the possibility of losing it and remaining vulnerable to Google's search and ad algorithms. These considerations are within the board's purview and, given the lack of evidence for a motive for pursuing a low-value transaction, could not amount to an argument for bad faith. Here the court cited its statement in BJ's in which, similar to Morton's and AboveNet, the plaintiff had provided no explanation of why the disinterested and independent directors would disregard their fiduciary duties in order to advance the CEO's interests (see In re BJ's Wholesale Club, Inc. S'holders Litig., C.A. No. 6623–VCN, , at *10 (Del. Ch. Jan. 31, 2013)). For further discussion of the BJ's decision, see Legal Update, Delaware Court of Chancery Continues to Address "Bad Faith" Under Novell.

The plaintiffs also argued that the board was controlled by interested parties, which would subject the transaction to a stricter standard of review. To establish this, they emphasized several pieces of evidence to support their contention that the four disinterested and independent directors of Answers Corporation were in fact controlled by the three insider directors. In particular, the plaintiffs pointed out that:

The court noted that the last argument was relevant to an allegation of a failure to exercise due care, which could not sustain a claim based on bad faith. As for the allegations of the outside directors' lack of involvement, the court held that they were based on facts that simply represented a common reality of deal negotiations in which some board members are more involved than others. Even if the outside directors reviewed the terms of the deal at a higher level, the overall evidence pointed to an entire board that was focused on obtaining the highest price reasonably available to the shareholders.