A Decade after Disney: A Primer on Good and Bad Faith
43 Pages Posted: 30 Oct 2014 Last revised: 29 May 2015
Date Written: September 9, 2014
Nearly ten years after the end of the highly-publicized Disney trial, commentators still disagree about the precise contours of good and bad faith in Delaware corporate law. Yet, there also is much scholarly agreement. Further, despite the outpouring of articles that followed upon the heels of the Disney litigation, some aspects of good and bad faith remain largely unexplored by commentators. Moreover, the academic literature does not clearly recognize that the Delaware courts have definitively settled certain issues regarding the relationship between good and bad faith.
A decade after Disney, it is worth summarizing the settled law of good and bad faith -- including its unexplored and unrecognized aspects -- in one place. This Article does just that.
First, this Article synthesizes the established law of good and bad faith into a coherent primer, covering all the basics about which there is little dispute while avoiding any intractable scholarly debates. Second, this Article addresses topics that have not been discussed in detail in the scholarly literature, including how to prove bad faith and the effect of management having mixed motives that include bad faith. Third, this Article clarifies, once and for all, that good and bad faith are binary opposites.
Keywords: Disney, good faith, bad faith, Delaware, corporate, Lyondell, primer
Suggested Citation: Suggested Citation