Attorneys in the Perkins Coie Corporate Finance Group recently authored an article titled "Advising the Board of Directors in Acquiring a Business" that was published in Insights: the Corporate & Securities Law Advisor. Authorizing significant acquisitions can create legal risks for directors, and directors who authorize acquisitions that prove unsuccessful can be subject to litigation. While courts have historically viewed a board's decision to acquire another company as an ordinary course business decision that is protected under the business judgment rule, courts apply a greater level of scrutiny to a target board's consideration of a takeover proposal. The court's greater scrutiny of the target board's behavior, which at times may require it to adhere to a standard of entire fairness, arises from the greater significance of an takeover to the target and a concern that the target board may act out of self-interest. The article:
    • discusses the fiduciary duties of directors in authorizing a company to make a significant acquisition,  
    • examines the usefulness and limitations of fairness opinions in buy-side transactions, and  
    • provides practical guidance for directors of acquiring companies and the attorneys who advise them.
You can find information regarding other recent developments and laws, regulations and rule proposals of interest to public companies on our website.

Sign up for the latest legal news and insights  >