Business Organizations Law Commons^™

Causation And Injury In Corporate Control Transactions: Cede & Co. V. Technicolor, Inc., Jacqueline M. Veneziani

Washington Law Review

In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court held that shareholders are not required to prove injury from corporate directors' failure to exercise due care in approving a merger transaction. Tort principles, the court stated, have no role in a business judgment rule analysis. Therefore, once shareholders prove a violation of the directors' duty of care, the burden is shifted to the directors to prove the entire fairness of the transaction despite the absence of a breach of the duty of loyalty. This Note argues that the entire fairness review of a disinterested board transaction is unworkable. …