27 Analyses of this case by attorneys

  1. Nevada Legislature Ponders Rejection Of Unocal And Revlon Standards

    Allen Matkins Leck Gamble Mallory & Natsis LLPKeith Paul BishopMarch 25, 2017

    In the first case, Unocal Corporation v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985), the Supreme Court imposed a heightened standard to board responses to hostile takeover attempts. In the second case, Revlon, Inc. v. MacAndrews & ForbesHoldings, Inc., 506 A.2d 173 (Del. 1986), the Supreme Court imposed enhanced scrutiny on director decisions in a sale of control situations. In the ensuing three decades, these two opinions have spawned a prodigious number of cases interpreting when and how these standards are applied.The Nevada legislature may soon reject both of these cases in no uncertain terms.

  2. Nevada Legislature Ponders Rejection Of Unocal And Revlon Standards

    Allen MatkinsKeith Paul BishopMarch 23, 2017

    In the first case, Unocal Corporation v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985), the Supreme Court imposed a heightened standard to boardresponses to hostile takeover attempts. In the second case, Revlon, Inc. v. MacAndrews & ForbesHoldings, Inc., 506 A.2d 173 (Del. 1986), the Supreme Court imposed enhanced scrutiny on director decisions in a sale of control situations. In the ensuing three decades, these two opinions have spawned a prodigious number of cases interpreting when and how these standards are applied.

  3. Delaware Supreme Court Reverses Injunction Requiring Thirty Day Go-Shop

    Bracewell & Giuliani LLPMichael HefterJanuary 2, 2015

    Shareholders of C&J ("Plaintiffs") brought this action to enjoin voting on the transaction, arguing, among other things, that the Board was overly influenced by C&J's CEO, Joshua Comstock, who allegedly wished to acquire Nabors in order to secure a lucrative employment package for himself. Plaintiffs further claimed that the Board failed to fulfill its duties under Revlon v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986) when it approved the transaction without engaging in an active market check. Under Revlon, when a board engages in a change-of-control transaction, it has a fiduciary duty to "achiev[e] the highest immediate value reasonably attainable."

  4. New York Court Holds That Revlon Standards Are Not Triggered In A Stock-for-Stock Merger Where No Change of Control Results

    Reed Smith LLPHerbert KozlovFebruary 24, 2014

    Revlon duties are implicated when there is a sale of control or where the break-up of the company is inevitable. Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986). In such circumstances, "the duty of the board . . . change[s] from the preservation of [the company] to the maximization of the company’s value at a sale for the stockholders’ benefit."

  5. Is There A “Revlon Duty” In California?

    Allen Matkins Leck Gamble Mallory & Natsis LLPKeith Paul BishopMay 20, 2017

    There are certain seminal Delaware corporate law cases that are so well known that corporate lawyers are wont to assume that they have been adopted and followed everywhere. One such case is Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (1986). In that case, the Delaware Supreme Court famously proclaimed that once the board of directors authorized a sale of the company, their “role changed from defenders of the corporate bastion to auctioneers charged with getting the best price for the stockholders at a sale of the company”.

  6. Is There A “Revlon Duty” In California?

    Allen MatkinsKeith Paul BishopMay 18, 2017

    There are certain seminal Delaware corporate law cases that are so well known that corporate lawyers are wont to assume that they have been adopted and followed everywhere. One such case is Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (1986). In that case, the Delaware Supreme Court famously proclaimed that once the board of directors authorized a sale of the company, their “role changed from defenders of the corporate bastion to auctioneers charged with getting the best price for the stockholders at a sale of the company”.

  7. Roadmap for Merger Decision-Making Process in Delaware

    Baker, Donelson, Bearman, Caldwell & Berkowitz, PCAmy Tidwell AndrewsDecember 8, 2016

    With respect to merger decisions specifically, boards must exercise due care and act in an informed and deliberative manner. In Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986), the Delaware Supreme Court held that directors have a duty to maximize shareholder value in a classic cash-out merger. In subsequent cases, the Delaware Supreme Court made it clear that the Revlon standard imposes enhanced judicial scrutiny of certain transactions involving a sale of control or where the company is being broken up, including stock-for-stock mergers and transactions involving stock and cash, as well as cash-out mergers.

  8. RBC Capital Markets, LLC v. Jervis, No. 140, 2015 (Del. Nov. 30, 2015) (Valihura, J.)

    Potter Anderson & Corroon LLPMarch 4, 2016

    On February 12, 2015, the Court of Chancery issued a decision denying Plaintiff’s application to shift her attorneys’ fees to RBC based on RBC’s alleged misrepresentations in its pre-trial filings, holding that RBC’s litigation conduct did not rise to the necessary level of “glaring egregiousness.” On appeal, RBC raised six issues:  (1) whether the trial court erred by holding that the Board breached its duty of care under the enhanced scrutiny standard enunciated in Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986); (2) whether the trial court erred by holding that the Board violated its fiduciary duty of disclosure by making material misstatements and omissions in Rural’s proxy statement; (3) whether the trial court erred by finding that RBC aided and abetted breaches of fiduciary duty by the Board; (4) whether the trial court erred by finding that RBC’s conduct proximately caused damages; (5) whether the trial court erred in applying the Delaware Uniform Contribution Among Tortfeasors Act (“DUCATA”); and (6) whether the trial court erred in calculating damages. Plaintiff cross-appealed from the trial court’s decision denying her application for fee shifting.

  9. RBC Capital Markets, LLC v. Jervis, No. 140, 2015 (Del. Nov. 30, 2015) (Valihura, J.)

    Potter Anderson & Corroon LLPNovember 30, 2015

    The trial court also awarded pre- and post-judgment interest.On February 12, 2015, the Court of Chancery issued a decision denying Plaintiff’s application to shift her attorneys’ fees to RBC based on RBC’s alleged misrepresentations in its pre-trial filings, holding that RBC’s litigation conduct did not rise to the necessary level of “glaring egregiousness.”On appeal, RBC raised six issues: (1) whether the trial court erred by holding that the Board breached its duty of care under the enhanced scrutiny standard enunciated in Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986); (2) whether the trial court erred by holding that the Board violated its fiduciary duty of disclosure by making material misstatements and omissions in Rural’s proxy statement; (3) whether the trial court erred by finding that RBC aided and abetted breaches of fiduciary duty by the Board; (4) whether the trial court erred by finding that RBC’s conduct proximately caused damages; (5) whether the trial court erred in applying the Delaware Uniform Contribution Among Tortfeasors Act (“DUCATA”); and (6) whether the trial court erred in calculating damages.Plaintiff cross-appealed from the trial court’s decision denying her application for fee shifting.The Supreme Court affirmed the Court of Chancery’s rulings on all of these issues.First, the Supreme Court affirmed the trial court’s determination that the Rural directors breached their fiduciary duties by engaging in conduct that fell outside the range of reasonableness in connection with the sale of the Company, and that this was a sufficient predicate for finding aiding and abetting liability against RBC.The Supreme Court rejected RBC’s argument that the business judgment rule—not Revlon—applied to the Board’s decision to explore strategic alternatives in December 2010. The Court concluded that “the most faithful reading of the record before us is that the Court of Chancery, as a factual matter, found that there was no exploration of strategic alternatives” but, rather, “the initiation of a sale process” “without Board authorization.”

  10. The Most Important Principles of Delaware Corporate Law Can’t Be Found In the DGCL

    Allen Matkins Leck Gamble Mallory & Natsis LLPKeith Paul BishopNovember 30, 2015

    In the 1980s, the Delaware courts conjured up a different set of rules that it applies to some of the most fundamental corporate transactions.  See Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985) (responses to unsolicited takeovers); Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986) (sale of control), and Blasius Indus., Inc. v. Atlas Corp., 564 A.2d 651 (Del. Ch. 1988) (impeding stockholder voting).  Each of these cases has in turn birthed scores of cases interpreting and applying the standard.