High court clarifies directors’ duties in cash-out merger

Trial Notebook

By Steven P. Garmisa

Hoey & Farina

Posted April 28, 2022 2:28 PM

Clarifying the duties of directors during a cash-out merger, the Michigan Supreme Court concluded that “directors of the target corporation must disclose all material facts regarding the merger” and can be directly sued by the target’s former shareholders if they fail to “maximize shareholder value by securing the highest value share price reasonably available.” Murphy v. Inman, No. 161454 (April 5, 2022).The directors of Covisint Corp. approved a cash-out merger with OpenText Corp. The price was $2.45 a share. A day after …

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