- Research Handbooks in Corporate Law and Governance series
Edited by Claire A. Hill and Steven Davidoff Solomon
AbstractOne significant problem that has historically characterized freezeout transactions, most notably when they are executed as mergers, is the problem of self-dealing: since the controlling shareholder stands on both sides of the transaction because he is the buyer and typically also dominates the seller’s board, the deal could be used as a mechanism to obtain a disproportionate benefit for the controller at the expense of the minority shareholders. In response to this risk, the Delaware courts have created various mechanisms to protect the minority from exploitation, particularly by subjecting freezeouts to a stringent standard of judicial review (‘entire fairness review’) and/or promoting the use of procedural protections that seek to emulate an arms-length transaction. This chapter presents a critical review of the case law governing freezeouts and discusses some perspectives on potential ways to address aspects that have not yet been addressed.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.