Fulfilling Fiduciary Duties In Going Private Transactions

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...
To view the full article, register now.
Law360 Pro Say Podcast
Check out Law360's new podcast, Pro Say, which offers a weekly recap of both the biggest stories and hidden gems from the world of law.