LAW 633 Lecture Notes - Lecture 18: Fide, Delaware General Corporation Law, Insider Trading
31 May 2020
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Document Summary
Van gorkom: a procedural breach can lead to the substance being flawed, shirking responsibilities. Broz: insider trading, entrenchment (motivated by keeping board seat) Page 2 of 4: non-pro rata dividend distributions to dominant shareholder, self-dealing can be cleansed to restore loyalty (burden on defendant, informed and disinterested board approval, not available for dominant shareholders. Sinclair: informed shareholder vote, in sinclair, it would be the remaining disinterested 3% minority owners of. Sinven: a disinterested shareholder vote is required in sinclair because there was a self-dealing dominant shareholder, courts are free to apply a more stringent test to cleanse the transaction, intrinsic fairness test. Bayer: was it good and fair for the corporation, illegality, ex: stealing, embezzlement or misappropriation, fraud, breach of duty of good faith. Walt disney: intentional/traditional bad faith (like breach of loyalty, gross negligence without due care (like breach of care, intentional dereliction of duties.
