Saying Yes: Reviewing Board Decisions to Sell or Merge the Corporation
72 Pages Posted: 19 Apr 2016
Date Written: 2015
This article responds to the explosion in litigation challenging board decisions to sell or merge the corporation by undertaking a comprehensive examination of the standards courts use and should use for reviewing such decisions. This examination is unique both in its breath and in its return to first principals by framing the analysis around the three goals for judicial review of board decisions generally. It shows current Delaware law on the topic often is a muddle—which results from the failure to match standards with these goals. It explores when, in light of these goals, review of decisions to sell or merge calls for different standards than used to review other decisions of corporate boards. This, in turn, leads to a proposal narrowing and refining the circumstances in which courts should review decisions to sell or merge under different standards than applied to other board decisions, as well as guidelines as to what such standards should entail.
Keywords: corporation, sell calls, merge calls
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