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This Flowchart Makes California's Corporate Law Look "Pretty, Pretty Good"!

You can read Delaware's General Corporation Law front to back and back to front and still know very little about Delaware corporate law.  The reason is that most of the important rules are not found in statutes but in a myriad of court decisions.  The process does not end, but begins, when a court announces a new rule.  Once announced, the rule is parsed and elaborated in subsequent decisions.  This is particularly true in the case of judicial review of board decisions involving mergers and acquisitions.  

I recently came across this flowchart prepared by three lawyers at Troutman Pepper (Matthew M. Greenberg, Taylor B. Bartholomew, and Christopher B. Chuff).   The flowchart will undoubtedly prove to be a very useful aid to corporate lawyers struggling to figure out which standard of review will be applied to their clients' deals.  However, it also illustrates how overweighted Delaware corporate law has become with its intricate distinctions and interpretations.  At some point, this may prove to be Delaware's undoing as the law becomes just too inaccessible for most practitioners and their clients.  

As I have noted, California courts have not adopted in reported decisions many of Delaware's most famous decisions.  For example, no California court has cited either of the Delaware decisions depicted in the flow chart (Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014) or Corwin v. KKR Financial Holdings LLC, 125 A.3d 304 (Del. 2015)).

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Mergers & Acquisitions, California Corporations Code, Delaware General Corproration Law

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30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
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