Fidelity National's $250 million investment in F&G Annuities survives Delaware shareholder lawsuit 

A Delaware judge has dismissed a shareholder lawsuit over Fidelity National Financial Inc.’s $250 million investment in F&G Annuities & Life Inc., concluding that the deal didn’t violate any fiduciary duties. The ruling, issued May 9 by Vice Chancellor Lori W. Will of the Delaware Court of Chancery, brings an end to a lawsuit that raised questions about corporate governance and the boundaries of fair dealing in related-party transactions.  

The case was sparked by a major capital move in late 2023, when Fidelity National—already the controlling stockholder of F&G after a 2022 spinoff—stepped in to provide funding through a preferred stock offering. The investment, totaling $250 million, gave Fidelity five million shares of newly created Series A preferred stock, which comes with a 6.875 percent dividend and will convert to common shares by January 2027 at a 17.5 percent premium over a $45 reference price.  

Because of the potential conflict—Fidelity held approximately 85 percent of F&G’s common stock—F&G’s board formed a special committee of two independent directors to evaluate the deal. The committee was given full authority to accept, reject, or renegotiate the terms. With guidance from Barclays and Sullivan & Cromwell, the committee negotiated several rounds with Fidelity before finalizing the investment.  

Not everyone was convinced. In May 2024, Roofers Local 149 Pension Fund, an F&G stockholder, filed a derivative lawsuit alleging that Fidelity had used its position as controlling stockholder to push through an unfair deal. The complaint argued that the transaction should be reviewed under Delaware’s “entire fairness” standard and claimed the price and structure disadvantaged minority shareholders.  

But the court found otherwise. In her 45-page opinion, Vice Chancellor Will ruled that while entire fairness did apply due to the controller’s involvement, the plaintiff had failed to allege any facts suggesting the deal terms were unfair. She noted that the complaint didn’t identify any specific aspect of the transaction—such as the dividend rate, conversion premium, or valuation—that was out of line with market expectations.  

In fact, the record showed that the special committee had rejected Fidelity’s initial proposals, secured more favorable terms, and relied on Barclays’ view that the final deal was better than what F&G could likely achieve in the public market. Barclays' analysis included a review of comparable transactions, market conditions, and capital alternatives, leading to a formal opinion that the terms were commercially reasonable.  

The plaintiff’s suggestion that F&G should have pursued other financing options, like drawing on a credit facility or issuing public debt, didn’t sway the court. Comparing preferred stock to debt was “apples to oranges,” the opinion noted, and speculation about other capital-raising methods wasn’t enough to claim unfairness.   

The court also acknowledged that both F&G and Fidelity had issued press releases announcing the investment before the special committee had completed negotiations. While this timing was described as “curious,” it didn’t, in the court’s view, amount to evidence that the process was rigged or that the committee had ceded control.  

The suit originally named both Fidelity and its longtime chairman, William P. Foley, as defendants. Foley was voluntarily dismissed earlier in the proceedings. With Fidelity’s motion to dismiss now granted, the case is closed.  

For wealth managers, institutional investors, and corporate directors, the decision serves as a reminder of the importance of strong procedural safeguards when handling insider transactions. While the deal was scrutinized due to its related-party nature, the court ultimately found that a thorough negotiation process and independent oversight helped protect the company and its shareholders.  

The ruling is another sign that Delaware courts will continue to look closely at governance processes but won’t intervene where plaintiffs can’t point to concrete signs of unfairness. For Fidelity National and F&G, it’s a clear legal win—and a green light to move forward from a contentious chapter in their post-spinoff relationship.