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Journeys in Revlon-Land with a Conflicted Financial Advisor: Del Monte and El Paso

19 Pages Posted: 3 Oct 2012 Last revised: 11 Oct 2012

Robert T. Miller

University of Iowa College of Law; New York University - School of Law, Classical Liberal Institute

Date Written: October 1, 2012

Abstract

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.

Keywords: Financial Advisor, Investment Banker, Conflict of Interest, Revlon, Del Monte, El Paso

JEL Classification: K22

Suggested Citation

Miller, Robert T., Journeys in Revlon-Land with a Conflicted Financial Advisor: Del Monte and El Paso (October 1, 2012). U Iowa Legal Studies Research Paper No. 12-24. Available at SSRN: https://ssrn.com/abstract=2156488 or http://dx.doi.org/10.2139/ssrn.2156488

Robert T. Miller (Contact Author)

University of Iowa College of Law ( email )

Melrose and Byington
Iowa City, IA 52242
United States
(319) 335-9034 (Phone)

HOME PAGE: http://lawredhat.law.uiowa.edu/faculty/robert-miller

New York University - School of Law, Classical Liberal Institute ( email )

40 Washington Square South
New York, NY 10012-1099
United States
(212) 998-6425 (Phone)

HOME PAGE: http://www.classicalliberalinstitute.org/

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