A Restatement of Corporate Freezeouts

Apparently overruling earlier decisions, the Supreme Court of has recently declared that a merger effected "for the sole of freezing out minority stockholders. . . is an abuse of the process. . . and a violation of a fiduciary duty for which Court may grant. . . relief. " In Singer v. Magnavox Co. a parent had merged with its eighty-four-percent-owned subsidiary. stockholders of the subsidiary had received only cash for their and thus had been eliminated from participation in the combined. The court confirmed that the parent owed a fiduciary to the minority by reason of its status as majority stockholder, but-in what is generally viewed as a new development in Delaware-the court held that this duty would not be met unless a corporate for the merger, other than mere elimination of the minorityheld, were supported by the evidence.