Controlling shareholder: friend or foe?

Author: | Published: 26 Jan 2018

US courts are progressively shifting their analysis to the process by which a transaction is approved, leaving behind fear of controlling shareholders’ influence

Corporate law has long been suspicious of controlling stockholders' motivations in transactions in which their interests may be different from those of the stockholders generally. Although courts in Delaware (where most publicly traded US corporations are incorporated) and elsewhere in the US are normally unwilling to second guess the business judgment of a board of directors, at least until recently, they have insisted on independently reviewing the entire fairness of transactions in which controlling stockholders may have had different interests from those of the non-controlling stockholders....