Law Blog Tag: Business Judgment Rule

Board of Directors Obligations as Applied to Mergers and Acquisitions

Merger and Acquisitions – Board of Director Obligations, Part 3

This article continues my series on obligations (and rights and responsibilities) of the board of directors during a merger and/or acquisition transaction. The first in the series detailed the directors’ basic duties of care, loyalty and disclosure. The second discussed the availability of indemnification and/or exculpation and the importance of acting in good faith. This third blog in the series will take a more in-depth look at a directors’ duty of loyalty in a merger and acquisition transaction.

Merger and Acquisitions – Board of Director Obligations, Part 2

This blog continues my series on obligations (and rights and responsibilities) of the board of directors during a merger and/or acquisition transaction. The first in the series went over the directors basic duties of care, loyalty and disclosure.

Merger and Acquisitions – Board of Director Obligations, Part 1

State corporate law generally provides that the business and affairs of a corporation shall be managed under the direction of its board of directors. Members of the board of directors have a fiduciary relationship to the corporation, which requires that they act in the best interest of the corporation, as opposed to their own. As such, directors owe a corporation a duty of loyalty, honesty and good faith. Generally a court will not second-guess directors’ decisions as long as the board has conducted an appropriate process in reaching its decision. This is referred to as the “business judgment rule”.