Journeys in Revlon-Land with a Conflicted Financial Advisor: Del Monte and El Paso
Robert T. Miller
University of Iowa College of Law; New York University - School of Law, Classical Liberal Institute
October 1, 2012
U Iowa Legal Studies Research Paper No. 12-24
Two recent cases in the Delaware Court of Chancery, In re Del Monte Foods Co. Shareholders Litigation and In re El Paso Corp. Shareholders Litigation, concern potential breaches of target directors’ Revlon duties when the company’s financial advisor has a conflict of interest related to the potential transaction. This article analyzes these cases with a view to exploring two main issues: (a) how breaches of the financial advisor’s duty of loyalty as an agent can support a claim that directors have breached their Revlon duties even if their reliance on the agent was entirely innocent, and (b) how, under Revlon, the directors’ fully-informed decision to engage or retain a financial advisor with a fully-disclosed conflict of interest should relate to subsequent decisions that the board may make relying on advice from such an advisor.
Number of Pages in PDF File: 19
Keywords: Financial Advisor, Investment Banker, Conflict of Interest, Revlon, Del Monte, El Paso
JEL Classification: K22
Date posted: October 3, 2012 ; Last revised: October 11, 2012
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