News
With the recent spate of private equity acquisitions in which the target company's senior management is often so closely involved — it was only a matter of time before the courts were asked to weigh in on how these deals work. "The Delaware Court of Chancery has lately issued a series of decisions that confront the special conflicts and resulting fiduciary issues that frequently arise with private equity MBOs," says Donald J. Wolfe, Jr., a partner in the Corporate Litigation Practice Group at Potter Anderson & Corroon LLP (Wilmington, Del.). Wolfe has written an article analyzing these decisions that is available for publication. He says the court appears to be taking a critical view of private equity MBOs. "The language of these opinions ventures beyond the mere insistence that directors adhere to the standard of an objective and reasonable auctioneer, seeming instead to focus on inherent conflicts of interest arising from management's participation on the sell side. In fact, they appear to reflect a degree of judicial suspicion and scrutiny that, although arguably justified, seems of a sort more typically reserved for circumstances that invoke entire fairness review." Wolfe's article is available for publication. [02/28/2008]
Channel: Jaffe Legal News Service - Articles for Publication
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