June 2006 Vol. 104 No. 7 THE REVIEW

Megasubsidiaries and Asset Sales under Section 271: Which Shareholders Must Approve Subsidiary Asset Sales

Yaman Shukairy

Corporate law statutes determine the nature of the relationship between shareholders, the principal owners of the corporation, and the board of directors, those who run and operate the corporation. Under the Delaware General Corporation Law (“DGCL”), many of the powers are delegated to the board of directors. More specifically, under section 141, “the business and affairs of every corporation . . . [are] managed by or under the direction of a board of directors . . . .” The Delaware courts have interpreted this provision by deferring to decisions by directors and their designated management under the business judgment rule, which presumes that in making a business decision, the directors acted on an informed basis with a good faith, an honest belief that the action taken was in the best interests of the company. As many have noted, “[t]he effect of this presumption when applied by a court is that the court will not substitute its judgment for that of the board, unless it is shown by a preponderance of the evidence that the directors’ decision involved a breach of fiduciary duty.”

   //  VIEW PDF
& Other Current Events

The Tools of Political Dissent: A First Amendment Guide to Gun Registries

On December 23, 2012, a newspaper in upstate New York published a provocative map. On it appeared...

Cultivating Inclusion

Twenty-five years ago, law schools were in the developing stages of a pitched battle for the future of legal...

Aftermarketfailure: Windows XP's End of Support

"After 12 years, support for Windows XP will end on April 8, 2014." So proclaims a Microsoft website with...

Globally Speaking—Honoring the Victims' Stories: Matsuda's Human Rights Praxis

Globally speaking, international law and the vast majority of domestic legal systems strive to protect...

Toward A Multiple Consciousness of Language: A Tribute to Professor Mari Matsuda

I am thrilled to be part of this commemoration of the twenty-fifth anniversary of Professor Matsuda's...
MAILING LIST
Sign Up to Join Our Mailing List