6 - Commentary on Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.

Summary

Revlon, Inc. v. MacAndrews & Forbes Holdings is a landmark decision setting shareholder primacy as the main concern in M&A transactions. The Delaware Supreme Court held that directors “are charged with the duty of selling the company at the highest price attainable for the stockholders’ benefit.” Professor Christina Sautter, as Justice Sautter in her rewritten feminist judgment on the case, takes the position that the interests of other constituencies should be taken into account to consider the long-term health of a company best. In her commentary on Justice Sautter’s opinion, Professor Afra Afsharipour also emphasizes the masculine norms of takeover contests and how the masculine traits of authoritarianism, paternalism, and informalism motivated the Revlon acquisition discussions. Justice Sautter suggests that when these masculine traits interfere, short-term shareholder wealth maximization usurps the company’s long-term interest. Sautter leans on the fact that a small group of men made all of the decisions for a cosmetic company whose customers are predominantly female to reveal the importance of stakeholder interest in a takeover contest. A feminist perspective that appreciates complex relational factors could have influenced the board’s decisions to maximize value in the long-term.