Publication
Legal Alert – Delaware Supreme Court: No Duty to Buy Out Minority Shareholders in Closely Held Corporations
by John S. Delikanakis
The Delaware Supreme Court recently considered whether the directors of a closely held corporation had a duty under common law fiduciary principles to repurchase a minority shareholder’s shares. The court also considered whether the covenant of good faith and fair dealing created such a duty within a shareholder’s purchase agreement. The court found no such duties in either instance, re-affirmed Delaware precedent on the issue, and highlighted the importance of having an agreed upon exit strategy for minority shareholders or members of closely held entities.
About Snell & Wilmer
Founded in 1938, Snell & Wilmer is a full-service business law firm with more than 500 attorneys practicing in 17 locations throughout the United States and in Mexico, including Los Angeles, Orange County, Palo Alto and San Diego, California; Phoenix and Tucson, Arizona; Denver, Colorado; Washington, D.C.; Boise, Idaho; Las Vegas and Reno, Nevada; Albuquerque, New Mexico; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; Seattle, Washington; and Los Cabos, Mexico. The firm represents clients ranging from large, publicly traded corporations to small businesses, individuals and entrepreneurs. For more information, visit swlaw.com.
