When Minority Stockholders Take Control

Law360, New York ( July 26, 2016, 4:06 PM EDT) -- It is well-understood that when a stockholder owns a majority of a company's voting stock, that stockholder is considered to be a "controlling stockholder" under Delaware law, triggering certain fiduciary duties owed to the company's other stockholders. These fiduciary duties inhibit, among other things, the ability of the controlling stockholder to perform any actions that can be interpreted as unduly "squeezing out" other company stockholders or benefiting the controlling stockholder at their expense. Claims like these are routinely litigated in the Delaware Chancery Court, often involving loans and commercial arrangements outside of the change-of-control context....

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