Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Series

Business Organizations Law

PDF

Yale Law School

1978

Articles 1 - 1 of 1

Full-Text Articles in Law

Restatement Of Corporate Freezeouts, Marvin A. Chirelstein Jan 1978

Restatement Of Corporate Freezeouts, Marvin A. Chirelstein

Faculty Scholarship Series

Apparently overruling earlier decisions, the Supreme Court of
Delaware has recently declared that a merger effected "for the sole
purpose of freezing out minority stockholders ...is an abuse of the
corporate process ...[and a] violation of a fiduciary duty for which
the Court may grant.. . relief."' In Singer v. Magnavox Co.,2 a parent
corporation had merged with its eighty-four-percent-owned subsidiary.
Minority stockholders of the subsidiary had received only cash for their
shares and thus had been eliminated from participation in the combined
enterprise. The court confirmed that the parent owed a fiduciary
duty to the minority by reason of ...