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Archive for January 15th, 2015

In a December 19, 2014 ruling the Delaware Supreme Court confirmed that the “market-check” requirement from the original Revlon decision, and the subsequent QVC decision, do not require a board to run a mandatory auction as part of every change of control transaction. There are other options the board may use to satisfy its Revlon duties in a change of control of transaction, such as a  post-signing market check, so long as there are no material barriers against the emergence of a superior proposal and the company’s stockholders are provided with a non-coercive, fully informed shareholder vote. In the ruling, C&J Energy Services, Inc. et al v. City of Miami General Employees’ and Sanitation Employees’ Retirement Trust, the court held “Revlon does not require a board to set aside its own view of what is best for the corporation’s stockholders and run an auction whenever the board approves a change of control transaction.”  The ruling is discussed in detail on The Harvard Law School Forum on Corporate Governance and Financial Regulation: Delaware Court Reverses Preliminary Injunction Requiring Go-Shop.

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