The Sale Of A Solvent Company Over Stockholder Objections

Law360, New York (May 31, 2017, 11:37 AM EDT) -- Delaware General Corporation Law § 226 (the “custodian statute”) bestows the Delaware Court of Chancery with the power to appoint a custodian for solvent companies and receivers for insolvent companies in certain circumstances.[1] Specifically, a custodian may be appointed where, inter alia, a company’s “stockholders are so divided that they have failed to elect successors to directors whose terms have expired,” and where the business is suffering or threatened with “irreparable injury because the directors are so divided respecting the management of affairs that the required vote for action by the board of directors cannot be obtained and the stockholders are...

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