Law360, New York ( November 10, 2015, 10:44 AM EST) -- The Delaware Court of Chancery recently upheld a claim that a director who voted to approve a merger had a conflict of interest based on his affiliation with a hedge fund that allegedly was focused on short-term gains. In refusing to dismiss the complaint, Vice Chancellor J. Travis Laster placed significant weight on the incumbent board's "fight letters" during a proxy contest, which argued that the hedge fund was pursuing a quick sale of the company to advance its own interests at the expense of other stockholders. The court's finding that pursuing short-term investment strategies — which are frequently associated with activist hedge funds — can give rise to a conflict of interest represents a significant development in the ongoing debate surrounding activist investing....