BA Targeted

Fiduciary Duty

A legal obligation of one party to act in the best interest of another party, often seen in the relationship between a corporation's board and its shareholders.

Bad Faith

Defined as 'intentional dereliction of duty' or a 'conscious disregard for one’s responsibilities'.

Gross Negligence

A severe degree of negligence taken as reckless disregard for the safety or reasonable treatment of others.

DGCL § 102(b)(7)

A provision allowing corporations to exculpate directors from monetary liability for breaches of the duty of care.

True Safe Harbor

A legal protection that completely shields individuals or entities from litigation, surpassing previous standards.

MFW (Kahn v. M&F Worldwide)

A legal precedent requiring controller transactions to be approved by an independent Special Committee and a majority-of-the-minority vote.

Special Committee

A group of independent directors set up to evaluate a transaction or situation to protect shareholder interests.

Majority-of-the-Minority (MOM) Vote

A voting requirement where a majority of votes must come from shareholders who are not part of a controlled group.

Controller Freeze-Outs

Transactions or actions taken by a controlling shareholder that disadvantage minority shareholders.

Caremark

Legal precedent establishing a standard for board oversight and governance to avoid bad-faith claims.

Bad-Faith Loyalty Claim

A non-exculpable claim alleging that directors acted with bad faith in a loyalty context, violating their duties.

Demand Futility

A legal doctrine allowing plaintiffs to bypass the demand requirement in derivative suits when certain criteria are met.

Director-by-Director Analysis

An examination method used to assess each director's potential conflicts or biases regarding a particular decision.

Revlon Duties

Duties that arise during a sale process, requiring the board to seek the best value for shareholders.

Just Say No Power

The ability of a board to reject a takeover bid, provided they act in good faith and Judge against Revlon triggers.

Special Litigation Committee (SLC)

A group formed to decide whether to continue or dismiss a derivative lawsuit after the demand has been excused.

Entire Fairness Review

A standard of judicial review requiring a showing that the transaction was fair in both process and price.