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Corporations

Sinclair Oil Corp. v. Levien

Headnote

As we learned in Guth and the introductory notes, the standard of review for self-dealing — “utmost good faith” or “intrinsic fairness” or, nowadays, “entire fairness” — is demanding. It is, thus, extremely important to determine which transactions count as self-dealing. What is Sinclair‘s answer? Do you agree with it? May Sinclair's answer condone abuse of minority stockholders? What would happen if Sinclair had accepted the plaintiff’s broader view, not just in the short run but also in the long run (when a corporate group has time to restructure)?