M&A Under Delaware's Public Benefit Corporation Statute: A Hypothetical Tour

Harvard Business Law Review, v. 4, p. 255, 2014

Widener Law School Legal Studies Research Paper No. 14-37

27 Pages Posted: 22 Oct 2014

See all articles by Frederick H. Alexander

Frederick H. Alexander

Morris, Nichols, Arsht & Tunnell, Attorneys At Law - Corporation Law Counseling Group

Lawrence A. Hamermesh

Widener University Delaware Law School

Frank Martin

Morris Nichols Arsht & Tunnell

Norman Monhait

Rosenthal, Monhait & Goddess

Date Written: October 20, 2014

Abstract

Noting the enthusiastic initial response to Delaware’s 2013 public benefit corporation statute, this Article presents a series of hypotheticals as vehicles for comment on issues that are likely to arise in the context of mergers and acquisitions of public benefit corporations. The Article first examines appraisal rights, concluding that such rights will be generally available to stockholders in public benefit corporations, and noting the potential for ambiguity in defining "fair value" where the corporation’s purposes extend to public purposes as well as private profit. Next, the Article examines whether and to what extent "Revlon" duties and limitations on deal protection devices may be relaxed or modified in the context of the sale of a public benefit corporation. Finally, the Article examines whether and to what extent a commitment to promote the specified public purposes of a public benefit corporation can be made enforceable against the buyer of the corporation.

Keywords: Delaware, corporation law, public benefit corporations, B corporations, benefit corporations, mergers and acquisitions

JEL Classification: K22, M14, G34

Suggested Citation

Alexander, Frederick H. and Hamermesh, Lawrence A. and Martin, Frank and Monhait, Norman, M&A Under Delaware's Public Benefit Corporation Statute: A Hypothetical Tour (October 20, 2014). Harvard Business Law Review, v. 4, p. 255, 2014; Widener Law School Legal Studies Research Paper No. 14-37. Available at SSRN: https://ssrn.com/abstract=2512339

Frederick H. Alexander

Morris, Nichols, Arsht & Tunnell, Attorneys At Law - Corporation Law Counseling Group ( email )

1201 N. Market Street
P.O. Box 1947
Wilmington, DE 19899
United States
302-575-7228 (Phone)
302-425-4666 (Fax)

Lawrence A. Hamermesh (Contact Author)

Widener University Delaware Law School ( email )

4601 Concord Pike
Wilmington, DE 19803-0406
United States
302-477-2132 (Phone)
302-477-2257 (Fax)

Frank Martin

Morris Nichols Arsht & Tunnell ( email )

1201 North Market Street, 16th Floor
P.O. Box 1347
Wilmington, DE 19801
United States

Norman Monhait

Rosenthal, Monhait & Goddess ( email )

919 Market Street
Suite 1401
Wilmington, DE 19801
United States

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