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Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.
Updated 10/28/23
This case is one of the few cases that every corporate lawyer knows. There are two take aways for our purposes.
First, note how the court examines the directors' motives and the reasonableness of the board's actions in response to the perceived threat. It's a good application of Unocal.
Second, note how the role of the board changes when it was clear the company was being sold. Before that point, the court was willing to accept that the board's defensive actions were a good faith attempt to protect the shareholders. But once the sale was clearly happening, the board's role was to focus solely on maximizing the sales price. This is sometimes referred to as Revlon duties or more whimsically, being in Revlonland.
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