Rethinking Judicial Review of Director Care

Abstract:     
This article offers an extended critique of the Delaware Supreme Court's unprecedented use of an entire fairness test in a breach of due care setting, as first articulated in Cede & Co. v. Technicolor, Inc. 634 A.2d 345 (Del. 1993) and Cinerama, Inc. v. Technocolor, Inc., 663 A.2d 1156 (Del. 1995). The article then argues for a generalized reasonableness standard for director conduct and for judicially reviewing care claims, thereby providing Delaware law with something it has lacked historically ? a pervasive (yet still streamlined) duty of due care.

Accepted Paper Series