Were you able to keep track of the new legislative changes that affect California businesses and business lawyers? Don’t worry, we did and here are some of the key statutory changes you need to know about.
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.”