Defending the corporate bastion: proportionality and the treatment of draconian defenses from Unocal to Unitrin

Article Abstract:

The Delaware Supreme Court's ruling in Unitrin, Inc. v. American General Corp. revises the standards set forth in Unocal Corp. v. Mesa Petroleum Co. for assessing the efforts of corporate directors in fending off hostile takeovers. Unocal established the proportionality test for determining whether the actions of directors in response to a perceived threat to the corporation and shareholders fell within the business judgment rule. Unitrin bifurcates this standard by first considering if director actions preclude or coerce shareholder control in a draconian fashion and, if not, if the actions could be considered reasonable.

Mergers & Acquisitions, Acquisitions and mergers, Business judgment rule

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When must a board of directors dilute a controlling shareholder?

Article Abstract:

The Delaware Court of Chancery, in Mendel v. Carroll, found no reason to require the board of directors to dilute the controlling shareholders' interest, since the shareholders' refusal to sell was proper under their fiduciary obligations. Although denying the plaintiffs' request for a preliminary injunction, the court recognized both the controlling shareholders' stake in the situation and the minority shareholders' desire to obtain fair value.

Minority stockholders

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To whom it may concern: fiduciary duties and business associations

Article Abstract:

The author discusses the fiduciary duties of managers of `partnerships, corporations, and limited liability companies. Topics include the nature of business associations and the identification and articulation of group interests to explain fiduciary duties.

States, Disclosure statements (Accounting)

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