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Court Of Chancery Explains Need To Plead Unfairness Of Conflicted Deal

Posted In Fiduciary Duty

The Ravenswood Investment Company LP v. Winmill, C.A. 3730-VCN (May 31, 2011)

Some may think that all you need to state a claim for breach of fiduciary duty is to allege the action under attack involved a conflicted board.  Not so.  At the very least, a plaintiff also needs to allege facts that show the deal was unfair to the company.  Once that is pled, then the burden does shift to the conflicted board to justify the transaction.

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