A Delaware ruling on directors’
responsibilities in company sales could change the way boards
sell their companies
Few things put more responsibility, or more stress, on
directors of a publicly traded company than its possible sale.
And few corporate governance topics have received more
attention than directors' responsibilities with regard to this
situation. However, a Delaware Supreme Court decision at the
end of 2014 changed many lawyers' views of what directors must
do to sell a company. This is an updated review of directors'
responsibilities regarding sales of their companies.
The possibility that a company will be sold can arise in a
number of ways. The company can receive an unsolicited bid from
a potential purchaser. Or the CEO of the company can propose to
the board a strategic combination with another company.
Alternatively, the board can decide that the company should
seek a buyer, possibly to access financial support...