초록 열기/닫기 버튼
In freeze-out merger to eliminate minority shareholders, Delaware courts have required “entire fairness standards”. The general rule, long established in Delaware and elsewhere, is that controlling shareholders owe a fiduciary duty to the corporation and minority shareholders. This obligation requires that controlling shareholders demonstrate that the terms of the transaction are entirely fair to the subsidiary. The concept of fairness has two basic aspects: fair dealing and fair price. The former embraces questions of when the transaction was timed, how it was initiated, structured, negotiated, disclosed to the directors, and how the approvals of the directors and the stockholders were obtained. The latter aspect of fairness relates to the economic and financial considerations of the proposed merger, including all relevant factors: assets, market value, earnings, future prospects, and any other elements that affect the intrinsic or inherent value of a company's stock. However, the test for fairness is not a bifurcated one as between fair dealing and price. All aspects of the issue must be examined as a whole since the question is one of entire fairness. If controlling shareholders want to avoid judical review, the court states that in the context of a merger transaction where an independent special committee of directors approves of the transaction, the court will apply a two-part test to determine if shifting the burden to the plaintiff is appropriate. First, the majority shareholder must not dictate the terms of the merger. Second, the special committee must have real bargaining power that it can exercise with the majority shareholder on an arms length basis. Additionally the transaction depends on the approve of majority of minority shareholders.
키워드열기/닫기 버튼
entire fairness review, interest conflict, controlling shareholders, freeze-out, tender offer/merger, special committee, business purpose standard, coercion
