Corporate directors traditionally have been immunized from liability for corporate actions involving questions of policy or "business judgment," if such actions are taken in the exercise of due care, in good faith, and in compliance with applicable fiduciary duties. Judicial review of decisions made by corporate boards of directors in unsolicited takeovers generally has been barred by this business judgment rule. A recent challenge to this precept was brought in Panter v. Marshall Field & Co., a Seventh Circuit decision which highlighted many of the issues surrounding application of the business judgment rule in the context of a take-over attempt.
Lavinia A. James,
Panterv. Marshall Field & Co.: The Good Faith Standard for Corporate Directors,
U. Rich. L. Rev.
Available at: http://scholarship.richmond.edu/lawreview/vol16/iss2/7