Delaware's Court of Chancery has issued a ruling that expands the fiduciary duties of corporate board members when approving mergers involving controlling shareholders. The decision strengthens protections for minority investors.
Legal experts say the ruling will require boards to demonstrate a more rigorous process for evaluating fairness opinions and negotiating deal terms. Companies incorporated in Delaware represent over 60 percent of Fortune 500 firms.
Corporate defense attorneys are advising clients to update governance policies and document board deliberations more thoroughly to withstand judicial scrutiny under the new standard.
