Transactions in Control
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Has he disclosed his interest?
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YES
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Then this isn't a transaction in control, dummy. But is there a nonmajority interested shareholder?
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NO
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Is there a controlling shareholder?
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YES
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What's he doing with his control?
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Selling it.
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YES
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NO
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Did either the disinterested directors or the shareholders ratify?
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In itself unfair. Disgorgement of profits even if price was fair. (Oysters)
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Do a majority of the minority shareholders ratify? Or did majority of disinterested directors approve?
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Exercising it. (Kahn v. Lynch).
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Free to get a premium unless it interferes with long-term interests of the corporation. (Zeitlin, Perlmann)
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NO
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YES
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NO
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YES
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Equal fairness, burden on D.
(Cookies, Cooke)
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Was the transaction waste?
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Equal fairness, burden on D.
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Equal fairness, burden on P.
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YES
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NO
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Requires unanimous consent of shareholders. (Vogelstein)
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Equal fairness, burden on P.
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Transactions in Control
