Rethinking Delaware's Corporate Opportunity Doctrine
Stephen M. Bainbridge
University of California, Los Angeles (UCLA) - School of Law
November 6, 2008
UCLA School of Law, Law-Econ Research Paper No. 08-17
Although the prohibition on taking of organizational opportunities is well established, the standards applied to this problem in corporate law disputes are vague and imprecise. Corporate directors and officers lack clear guidance as to when a particular business venture may be taken for themselves or must first be offered to the corporation. In this article, I review the relevant Delaware case law, focusing on the ambiguities inherent therein. I then offer a proposed alternative regime, providing greater certainty and predictability.
Number of Pages in PDF File: 16
Keywords: corporate opportunity doctrine, fiduciary duties, directors, officers
JEL Classification: K22
Date posted: November 9, 2008
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