What M&A Financial Advisors Need to Know About Delaware’s Business Judgment Rule

In recent years, Delaware courts reviewing M&A transactions simultaneously have become more deferential to well-functioning corporate boards and more suspicious of those boards’ financial advisors. That is, Delaware courts more frequently have closely scrutinized transactions where financial advisors have, or appear to have, conflicts of interest but, at the same time, they have expanded business judgment rule deference to boards and their advisors when their actions have been approved by an uncoerced, fully-informed shareholder vote. This article provides financial advisors and their counsel with considerations and perspective from recent Delaware cases concerning fiduciary duties of directors and the impact on potential liability for their advisors in mergers and acquisitions.

Reproduced with permission from Mergers & Acquisitions Law Report, 20 MALR 615, 4/24/17. Copyright 2017 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com