Which of the following provides procedural fairness when controlling shareholder engages in a transaction,such as a merger,with the company it controls?
A) A determination of the target's intrinsic value regardless of maximum shareholder value
B) The use of independent committees,advised by independent financial consultants
C) An arm's-length bias
D) A no-talk provision

Question

Quizplus · Accepted Answer

The use of independent committees, advised by independent financial consultants, provides procedural fairness by ensuring that the transaction is objectively evaluated and the interests of all shareholders are considered, not just those of the controlling shareholder. This approach helps to mitigate conflicts of interest and promote transparency and accountability in the decision-making process. Options A, C, and D do not provide sufficient procedural fairness.

Which of the Following Provides Procedural Fairness When Controlling Shareholder