Interested director transactions and the (equivocal) effects of shareholder ratification

Article Abstract:

Delaware courts should resolve the uncertainty surrounding the interpretation of section 144 of the Delaware General Corporation Law and find that informed ratification by a majority of disinterested shareholders extinguishes claims that a director entered into a self-interested transaction. Such a rule would provide directors with a bright line that would encourage them to seek approval for beneficial interested transactions. It would also ensure that minority shareholders could not undo a transaction that the majority supported.

Stockholder Relations, Stockholders, Investor relations

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Nonprofit corporations: conversion to for-profit corporate status and nonprofit corporation members' rights

Article Abstract:

The Delaware Supreme Court's 1994 decision in Farahpour v. DCX held nonprofit corporations can be converted into for-profit corporations without members' approval, since non-profits' governing bodies have more authority than typical corporate boards. The court also held common law and state General Corporation Law principles applicable to nonprofit corporations' governance, with nonprofits' fiduciaries subject to the same standards as for-profits' in answering allegations of violations.

Cases, Nonprofit organizations, Case Note

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Corporate opportunity doctrine and interested director transactions: a framework for analysis in an attempt to restore predictability

Article Abstract:

The author discusses issues surrounding the common law doctrine of corporate opportunity which concerns director loyalty and which is related to limitations contained in interested-director-transactions statutory provisions. The author proposes a framework for judicial analysis which could provide more consistency, uniformity, and clarity. Three flow charts are included.

States, Powers and duties

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