Fulfilling Fiduciary Duties In Going Private Transactions
July 16, 2013, 12:16 PM EDT
Law360, New York (July 16, 2013, 12:16 PM EDT) -- In their management of a corporation’s business and affairs, directors and officers owe fiduciary duties to the corporation’s stockholders. Stockholders generally do not owe fiduciary duties to each other, but a stockholder may owe fiduciary duties to other stockholders if it owns a majority interest or otherwise exerts control over the corporation. See Kahn v. Lynch Communication Sys. Inc., 638 A.2d 1110 (Del. 1994).
Generally, courts review corporate actions by management or controlling stockholders using the business judgment rule. The business judgment rule is a presumption...