Leslie J Murphy v. Samuel M Inman III

Summary

The Court held that corporate directors owe shareholders independent common-law fiduciary duties that were not abrogated by the Business Corporation Act. In a cash-out merger after the decision to sell has been made, directors must disclose material merger facts and seek the highest reasonably available share price. Applying a who-suffered-the-harm and who-receives-the-remedy framework, the Court held that the former shareholder's merger-fairness claim was direct rather than derivative and therefore reversed and remanded.