Freezeouts in Delaware: An Exploration of the Appropriate Standard of Review
Priya Gupta, Freezeouts in Delaware: An Exploration of the Appropriate Standard of Review, 2012 Colum. Bus. L. Rev. 707.
In the last decade, there has been a general increase in the number of transactions taking corporations private, and
consequently an increase in the amount of litigation over the fair treatment of minority shareholders in such deals. Courts, particularly those in Delaware, are in the process of developing a framework for analyzing fairness in these cases, but have repeatedly confronted the issue of the appropriate standard of review. As different forms of going private
transactions have developed, the case law has adapted to review the two primary forms—the negotiated merger freezeout and the tender offer freezeout—differently based on each transaction’s specific structure.
Most recently, the Delaware Court of Chancery has advocated a new rule in which both types of freezeouts would be subject to the same unified standard of review, despite their different technical forms. This Note argues that the proposed unified standard may not be the best solution to the perceived discrepancy in the treatment of negotiated merger freezeouts versus tender offer freezeouts. The two forms of freezeouts involve different relationships between parties and require different levels of oversight from courts in order to ensure fair treatment. The current dual standard may not be perfect, but the CNX Gas solution, in its current form, should not be adopted either.
Volume 2013 | Issue 1
A selection from our current issue.
- A Precedent Built On Sand: Norcon v. Niagara Mohawk
by Victor P. Goldberg
- Shadow Banking and Financial Distress: The Treatment of "Money-Claims" in Bankruptcy
by Chrystin Ondersma
- Beyond Securities Fraud: The Territorial Reach of U.S. Laws After Morrison v. N.A.B.
by David He
- Destined for Failure? An Analysis of the Biologics Price Competition and Innovation Act of 2009
by Sara Margolis
- Can the L3C Spur Private Foundation Program-Related Investment?
by Edward Xia
- Lecture: The Institutional Dimensions of Antitrust Adjudication: Exploring the Bases of Judicial Decision Making in the United States and Europe
- Introduction: The Institutional Dimensions of Antitrust Adjudication: Exploring the Bases of Judicial Decision Making in the United States and Europe
by William H. Rooney
- Antitrust and the Judicial Virtues
by Daniel A. Crane
- Comment: A European Perspective on the Institutional Dimensions of Antitrust Adjudication
by Jean-François Bellis
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