When a change of control occurs, the board's role shifts from preserving the corporation to obtaining the best price reasonably available. Review is enhanced scrutiny rather than business judgment.
The duties apply to cash acquisitions and control changes.
Alternative Names:
Revlon|Enhanced Scrutiny
Why it Matters?
Whether Revlon applies is the threshold, since stock-for-stock mergers between widely held companies generally do not trigger it while cash sales and transfers to a controlling holder do. Once triggered, the board must show a reasonable decision process aimed at value maximization, though there is no single required blueprint. Corwin cleansing through an informed uncoerced stockholder vote restores business judgment review in many transactions.
Frequently Confused with
Related terms
Frequently asked questions
When do Revlon duties apply?
What is Corwin cleansing?
