Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Corporate CounselorKickerFeaturesSectionsNewsLJN Newsletters

DE Court Applies Business Judgment Rule in Reviewing LBO

By ALM Staff | Law Journal Newsletters |
September 27, 2013

M&A transactions involving publicly traded companies with controlling stockholders often present thorny issues for dealmakers and their legal counsel. Even in the case of a purchase by an unaffiliated third party, controlling stockholders understandably may seek to leverage their control positions to achieve results that best suit them. Further, private equity buyers in particular often require controlling stockholders to “roll over” a portion of their stock into equity of the continuing corporation and/or enter into other arrangements to facilitate the transaction.

As a result, litigation challenging the fairness of these transactions to the public stockholders is a staple of M&A practice. In an effort to assure a degree of fairness to the public stockholders, the Delaware courts traditionally have imposed more intrusive standards of review than are customarily employed in buyouts of companies without controlling stockholders.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

The DOJ's Corporate Enforcement Policy: One Year Later Image

The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.

A Lawyer's System for Active Reading Image

Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.

Protecting Innovation in the Cyber World from Patent Trolls Image

With trillions of dollars to keep watch over, the last thing we need is the distraction of costly litigation brought on by patent assertion entities (PAEs or "patent trolls"), companies that don't make any products but instead seek royalties by asserting their patents against those who do make products.