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What Are Directors’ Fiduciary Duties When Selling Control of a Corporation?

In Delaware, courts impose the so-called Revlon duty, which can be described as the fiduciary duty to make reasonable efforts to obtain the highest sales price reasonably possible in view of the market for the company. This may even involve conducting a public auction for the company or at least a check of the market, depending on the circumstances, and agreements must include a so-called “fiduciary out” to allow the directors to accept a higher bid after the agreement has been signed by a would-be buyer. See Revlon Inc. v MacAndrews & Forbes Holdings, Inc. (Del 1985) 506 A2d 173; Omnicare, Inc. v NCS Healthcare, Inc. (Del 2003) 818 A2d 914. But, as Keith Paul Bishop notes in his recent blog post on California Corporate and Securities Law, “[d]espite its notoriety in Delaware, Revlon is nearly unknown in California jurisprudence.” Continue reading

The Perils of an Attorney Joining a Corporate Board

ThinkstockPhotos-185025107From time to time, attorneys are asked to serve as corporate directors or officers. Watch out—there may be some serious perils involved for the attorney and his or her law firm. Continue reading

4 Things to Know Before Joining a Nonprofit’s Board

ThinkstockPhotos-78291349You’ve been asked to serve on the board of a nonprofit organization. Congratulations—you can render a real service to the community! Attorneys do make great nonprofit directors, but before you sign on, here are four things you should know. Continue reading

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