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An Introduction to the Law of Corporations: Cases and Materials, Fall 2017

Smith v. Van Gorkom

Headnote

Van Gorkom is a controversial case of the Duty of Care in the context of a corporate acquisition. Van Gorkom occurred before and was the impetus for the adoption of the §102(b)(7)'s exculpation provision. Consequently, the result in Van Gorkom is unlikely to occur again. However, the Van Gorkom case is worth reading because it demonstrates the kinds of director failures that may well rise to the level of a violation of the duty of care.