In post No. 29 I said a few things about the doctrine of waste - and the business judgment rule - in Delaware corporate law. This is one of the most difficult hurdles to take for plaintiffs in fiduciary duty cases against corporate directors.
Lawrence Cunningham offers an interesting initial comparison between the corporate law doctrine of waste and the contract law doctrine of substantive unconscionability. As to the doctrine of waste, he illustrates the difficulty for shareholders to win claims based on this theory by a case in which "a Delaware company defeated a claim of waste a few years ago even when it paid a newly recruited executive $140 million for a year’s work that was totally unsatisfactory." Uhm, Disney maybe?
Anyway, the end of his post sounds promising.
At least, I think, there may be an article to write investigating the doctrine and its current and potential kinship with contract law and its doctrine of substantive unconscionability. Thanks to my RA, Christa Laser, we are researching this possibility this summer. Thoughts are eagerly welcome on its viability.
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