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Orman v. Cullman
3/15/2024
We've discussed how you might show an individual director or officer is conflicted. But should we care about a single director? Recall that directors don't act alone; they act as a board. If one director in ten is conflicted, should we really scrap the whole transaction?
This case will discuss how to show the board as a whole is conflicted. To do this, we just look at each director to see which ones were conflicted. If a majority of the voting board members are conflicted, then the board's decision is conflicted. If a majority of the voting board members aren't conflicted, then the board isn't conflicted. You just analyze each indivudually and then count how many are conflicted.
Cast of Characters
General Cigar: A cigar manufacturer
Swedish Match AB: A company seeking to gain a stake in General Cigar.
Cullman Group: Shareholder of 67% of the voting power of General Cigar, and keen on helping Swedish Match gain a stake in General Cigar.
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