In a series of recent decisions, Delaware courts have emphasized the potential risks arising from a board’s financial advisers having conflicts of interests. While earlier decisions shifted liability, perhaps unfairly, towards advisers, in a 2015 case—RBC Capital Markets v. Jervis—the Delaware Supreme Court made it explicitly clear that it is the directors who are responsible for contemplating these risks. Boards must take an active role in overseeing their financial advisers, including contemplating their actual or potential conflicts. The directors are fiduciaries; the advisers are not.
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