Under the Revlon doctrine, what is required of directors during a sale of control?

• A. Directors may abandon sale process to protect long-term strategy.
• B. Directors must pursue highest value for shareholders and conduct a fair process, not prematurely abandon sale processes.
• C. Directors should maximize their own compensation in sale.
• D. Directors need not consider shareholders' value.

Answer: (B)

When a company is facing a sale of control, the board’s duties under Revlon shift to prioritizing the value received by shareholders through a fair, competitive process. The directors act like auctioneers, obligated to pursue the highest price reasonably available and to run a process that invites fair competition among bidders, ensuring equal treatment and avoiding actions that would foreclose bidding. This focus on maximizing shareholder value overrides other considerations, and directors should not abandon a sale process prematurely to pursue unrelated long-term strategies or personal interests. The idea is to secure the best price for shareholders in a sale of control, rather than pursue non-price goals or self-serving perks.