A Study On The Legal Issues Of The Trustee 's Duty Of The Target Company In American M & A

This paper aims at discussing the legal problems of director fiduciary duties in the target corporation in the field of American takeovers and M&As. It first summarizes the content, sources of law, cause as well as the significance of fiduciary duties of directors. Then, it begins the fiduciary duties in the context of takeovers and M&As with a brief introduction of M&A, followed by respective examination of problems in the hostile takeovers and negotiated M&As, so as to uncover some helpful rules. In a hostile takeover, it explains the debate of director’s role and focus on the development of the intermediate "proportionality" review established in the middle of1980s, while in negotiated M&As, it looks into different facets of the Classic Smith v. Van Gorkom and brings up the argument between form and substance. As for theories, this paper absorbs some form the influential Law and Economics Theory and applies them to specific problems.