M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Monday, April 4, 2011

Irreconcilable Differences in Delaware

Steven Davidoff (The Deal Professor, OSU Law) will be chairing a symposium sponsered by the Delaware Journal of Corporate Law at Widener Law School on Monday, April 11.  The symposium, Irreconcilable Differences: Director, Manager, and Sharehyolder Conflicts in Takover Transactions promises to be a great event. 

TAKEOVER TRANSACTIONS involving directors, managers, and shareholders are rife with conflicts. These conflicts can be stark as in a freeze-out or management buy-out. They can also be more subtle. Management can be requested to remain part of the management group, a so-called management buy-in. A controlling shareholder can receive a differential benefit in a takeover. Directors and management can skew the takeover process to preferred bidders through control of the sale process and negotiation of acquisition agreement lock-ups. From a buyer perspective, directors can structure the takeover to further entrench themselves. The Delaware courts have recently grappled with many of these issues. Recent opinions have addressed poison pills, the appropriate standard to govern judicial review of freeze-out transactions, differential treatment of controlling and non-controlling shareholders, the parameters of lock-ups, and issues arising from undue management influence in the management buyout process. 

The Delaware courts are also grappling with the appropriate remedy when proper procedures are not utilized in a takeover. This conference hosted by The Delaware Journal of Corporate Law will bring together academics, judges, and practitioners to discuss the current Delaware case-law on these issues, appropriate standards to regulate these conflicts, and related research.

Steven and the folks over at the DJCL look like they've put together a really interesting group.  It'll be a great day.   If you're in the Wilmington area, drop by!



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