Fiduciary duties of directors in the context of going-private transactions to the minority shareholders under Delaware law

by 1976- Wang, Yuan

This thesis discusses the different fiduciary duties and standards of review imposed by Delaware laws on the directors to the minority shareholders in the going-private transactions structured either as a merger or as a tender offer voluntarily initiated by the controlling shareholders. In the context of a merger, the disinterested and independent directors will face a duty of care and be subject to the business judgment rule. For the interested or dependent directors, they will bear a duty of loyalty and be bound to the entire fairness standard accordingly. In the case of a tender offer, currently the Delaware courts impose no fiduciary duties on the directors. This thesis thus makes a proposal to ask for Delaware Court to impose the evaluation and recommendation duty on the directors to the minority shareholders as soon as possible so as to better protect those shareholders.