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Full-Text Articles in Business Law, Public Responsibility, and Ethics
Good Faith In Revlon-Land, Christopher M. Bruner
Good Faith In Revlon-Land, Christopher M. Bruner
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The Delaware Supreme Court has set a very high hurdle for plaintiffs challenging directors' good faith in the sale of a company. In Lyondell Chemical Company v. Ryan, the court held that unconflicted directors could be found to have breached the good faith component of their duty of loyalty in the transactional context only if they "knowingly and completely failed to undertake," and "utterly failed to attempt" to discharge their duties.
In this essay I argue that the Lyondell standard effectively imports into the transactional context the exacting standard previously applied in the oversight context — a move clearly aimed …
Shareholder Bylaws And The Delaware Corporation, Christopher M. Bruner
Shareholder Bylaws And The Delaware Corporation, Christopher M. Bruner
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Much like hostile tender offers in the 1980s and 1990s, shareholder bylaws purporting to limit board authority in key areas of corporate governance are, once again, forcing Delaware's courts to grapple with the fundamental nature of the corporate form.
In this (short) essay written for a roundtable discussion at the 2009 Annual Meeting of the Southeastern Association of Law Schools, I discuss CA, Inc. v. AFSCME Employees Pension Plan - the 2008 opinion in which the Delaware Supreme Court began to define the nature and scope of the shareholders' bylaw authority. In CA, Inc. the court held that a proposed …
Good Faith, State Of Mind, And The Outer Boundaries Of Director Liability In Corporate Law, Christopher M. Bruner
Good Faith, State Of Mind, And The Outer Boundaries Of Director Liability In Corporate Law, Christopher M. Bruner
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The Delaware General Corporation Law was amended in 1986 to permit shareholder-approved exculpatory charter provisions shielding corporate directors from monetary liability for certain fiduciary duty breaches not including (among other things) breaches of the duty of loyalty and acts not in good faith. This article examines the development of corporate fiduciary duty doctrine in Delaware leading up to and following this statutory amendment, focusing particularly on the Delaware courts' evolving conception of the meaning anddoctrinal status of the good faith concept employed in recent cases to permit a non-exculpable cause ofaction for conscious nonfeasance.
The article argues that Delaware's good …