Connecticut
How Case on Fiduciary Duties of Corporate Directors applies in Connecticut: state-specific rules, key cases, and bar exam notes for Corporate Law.
Connecticut adheres to the principles of fiduciary duty as articulated in the landmark case of Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., emphasizing that corporate directors owe loyalty and care to shareholders. The state's courts uphold these duties rigorously, often scrutinizing the actions of directors in matters involving potential conflicts of interest.
In Connecticut, corporate directors must act in good faith and in a manner they reasonably believe to be in the best interest of the corporation and its shareholders, focusing on avoiding self-dealing and conflicts of interest.
The court held that directors have a duty to maximize shareholder value during a change of control, underscoring the primacy of shareholder interests.
This case reinforced the duty of care directors owe by ruling that a failure to inform shareholders of relevant information constituted a breach of fiduciary duty.
The court highlighted that conflicts of interest must be disclosed to the board and shareholders, as failure to do so is a breach of fiduciary duty.
Connecticut's approach to fiduciary duties aligns closely with the federal standard as outlined by Delaware case law, primarily focusing on loyalty and care. However, Connecticut emphasizes the need for transparency regarding conflicts of interest more rigorously than some federal jurisdictions.
Fiduciary duties of corporate directors are frequently tested on the Connecticut bar exam, particularly regarding director liability and the business judgment rule.