Publication Date
1-1-2003
Document Type
Article
Organizational Units
Sturm College of Law
Keywords
Corporate fiduciary duties, Traditional contract doctrine, Corporate managers, Mergers, Obligations
Abstract
This article examines the tension between corporate fiduciary duties and traditional contract doctrine that arises when corporate managers agree to a merger and then suffer a change of heart. Specifically, it uses the Delaware case of IBP, Inc. v. Tyson Foods, Inc, to demonstrate how the obligations imposed on corporate managers by corporate law doctrine and by contract law doctrine may conflict in the merger context. In that context, a seller seeking to avoid a binding merger agreement must either honor their commitment or pay the price of their breach under contract doctrine, while corporate law doctrine may demand that directors simply dishonor the merger agreement. The article argues that traditionally, contract doctrine is given short shrift in the corporate context and suggests that Tyson shows that this is neither necessary nor desirable.
Publication Statement
Copyright held by the authors. User is responsible for all copyright compliance.
Originally published as Celia R. Taylor, When Good Mergers Go Bad: Controlling Corporate Managers Who Suffer A Change of Heart, 37 U. Richmond L.Rev. 577 (2003).
Recommended Citation
Celia R. Taylor, When Good Mergers Go Bad: Controlling Corporate Managers Who Suffer A Change of Heart, 37 U. Richmond L.Rev. 577 (2003).