How to Outline Corporations

In Torts or Contracts you outline elements. In Corporations, the element lists are short and the fight is almost always about the level of deference a court gives the board. A negligent-looking board decision and a self-dealing merger both involve "the duty of loyalty" or "the duty of care," but the outcomes differ entirely because one gets the business judgment rule and the other gets entire fairness. If your outline is organized by case, you will spend exam time hunting for the right case. If it is organized by standard of review, you will spend exam time arguing.

The second structural feature: Corporations is a statute-plus-common-law course. Delaware General Corporation Law and the Model Business Corporation Act supply the mechanics (who votes, what quorum, what a charter amendment requires), and Delaware case law supplies the fiduciary overlay. Find out which statute your professor uses. Many courses teach DGCL with MBCA comparisons; some do the reverse. Where they diverge meaningfully — director liability standards (MBCA § 8.31 versus Delaware's gross negligence formulation), conflicted-transaction safe harbors (DGCL § 144 versus MBCA subchapter F, §§ 8.60–8.63), demand requirements (Delaware's futility test versus the MBCA's universal demand) — put both in a two-column note, not two separate sections.

Third: the closely held corporation and the public corporation are effectively different courses inside one course. Oppression of a minority shareholder, buy-sell agreements, and reasonable-expectations doctrine belong in their own module. Do not let them bleed into your Unocal notes.

Track the analytical sequence a lawyer would follow, not necessarily your syllabus order. Nine modules cover almost every Business Associations syllabus:

Write this module as a decision tree, not a list of duties. Step one: is there a conflicted fiduciary on either side of the transaction, or a controlling shareholder extracting a non-ratable benefit? If no, the business judgment rule presumes an informed, good-faith, disinterested decision, and plaintiff must rebut it. Kamin v. American Express Co., 383 N.Y.S.2d 807 (Sup. Ct. 1976), is your example of how much deference that is. Smith v. Van Gorkom, 488 A.2d 858 (Del. 1985), is the rare rebuttal on process — and it triggered DGCL § 102(b)(7), which exculpates directors for duty-of-care damages but never for loyalty, bad faith, or improper personal benefit. Note that pairing explicitly: a pure care claim against exculpated directors is usually dead on the pleadings.

Step two: if there is a conflict, ask what cleanses it. For ordinary interested-director deals, DGCL § 144 and disinterested-director or shareholder approval restore business judgment review or shift the burden. For a squeeze-out or controller transaction, entire fairness (fair dealing plus fair price, Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983)) applies unless the defendant satisfies the dual protections of Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014) — an independent, empowered special committee and an informed majority-of-the-minority vote, both conditioned from the outset. For third-party mergers, a fully informed, uncoerced disinterested stockholder vote can restore the business judgment rule under Corwin v. KKR Financial Holdings LLC, 125 A.3d 304 (Del. 2015). Your outline should say, in one line each, what MFW cleanses and what Corwin cleanses. Students confuse them constantly.

Step three: the good-faith and oversight branch. In re Caremark International Inc. Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996), and Stone v. Ritter, 911 A.2d 362 (Del. 2006), locate oversight failure inside loyalty, which is why § 102(b)(7) does not save it. Marchand v. Barnhill, 212 A.3d 805 (Del. 2019), shows a Caremark claim surviving where the board had no monitoring system at all for a mission-critical risk. For corporate opportunity, keep Guth v. Loft, Inc., 5 A.2d 503 (Del. 1939), and Broz v. Cellular Information Systems, Inc., 673 A.2d 148 (Del. 1996), together with the line-of-business, interest-or-expectancy, and financial-capacity factors, plus the safe harbor of presenting the opportunity to the board.

Three questions in order. Is the claim direct or derivative? Apply Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031 (Del. 2004): who suffered the harm and who would receive the recovery. Second, was demand made or excused? Delaware consolidated Aronson v. Lewis, 473 A.2d 805 (Del. 1984), and Rales v. Blasband, 634 A.2d 927 (Del. 1993), into a single three-part, director-by-director test in United Food & Commercial Workers Union v. Zuckerberg, 262 A.3d 1034 (Del. 2021). Outline the Zuckerberg formulation as the operative test and keep Aronson and Rales as the historical framing your professor may still lecture from. Under the MBCA, demand is universal — no futility exception — so the fight moves to the board's response.

Third, if demand was made and refused, refusal is itself protected by the business judgment rule absent wrongful refusal. If demand was excused and the board forms a special litigation committee to dismiss, apply Zapata Corp. v. Maldonado, 430 A.2d 779 (Del. 1981): the committee must prove independence, good faith, and reasonable investigation, and the court may then apply its own independent business judgment. Add a practice note that § 220 books-and-records demands are the standard tool for building particularized facts before filing.

Make one page with four boxes. Defensive measures against a hostile bid get intermediate scrutiny under Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985): reasonable grounds to believe a threat existed, and a response reasonable in relation to that threat and not preclusive or coercive. Paramount Communications, Inc. v. Time Inc., 571 A.2d 1140 (Del. 1990), shows how much running room a board has to just say no; Air Products & Chemicals, Inc. v. Airgas, Inc., 16 A.3d 48 (Del. Ch. 2011), shows the outer limit.

Second box: when a sale of control or breakup is inevitable, Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986), and Paramount Communications, Inc. v. QVC Network, Inc., 637 A.2d 34 (Del. 1993), require reasonable efforts to get the best price reasonably available. Write down the trigger, because the trigger is where exam points are. Third box: board interference with the shareholder franchise gets Blasius Industries, Inc. v. Atlas Corp., 564 A.2d 651 (Del. Ch. 1988) — compelling justification — and inequitable action does not become permissible because it is technically legal, Schnell v. Chris-Craft Industries, Inc., 285 A.2d 437 (Del. 1971). Fourth box: appraisal under DGCL § 262, including the modern Delaware preference for deal price in an arm's-length, well-shopped transaction (DFC Global Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346 (Del. 2017); Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd., 177 A.3d 1 (Del. 2017)). Add DGCL § 203 and § 271 as statutory sidebars.

Only as much as your professor taught, but structure it as elements because that is what it is. Rule 10b-5: material misrepresentation or omission, scienter (Ernst & Ernst v. Hochfelder, 425 U.S. 185 (1976)), connection with a purchase or sale, reliance, causation, damages. Materiality is TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976), applied to contingent events through the probability/magnitude test of Basic Inc. v. Levinson, 485 U.S. 224 (1988), which also gives you fraud-on-the-market reliance and its rebuttals. Note the boundary: breach of fiduciary duty alone is not securities fraud (Santa Fe Industries, Inc. v. Green, 430 U.S. 462 (1977)).

Insider trading needs its own tree. Classical theory rests on a duty to the corporation's shareholders (Chiarella v. United States, 445 U.S. 222 (1980)); misappropriation rests on deceiving the source of the information (United States v. O'Hagan, 521 U.S. 642 (1997)); tipping liability requires a personal benefit to the tipper (Dirks v. SEC, 463 U.S. 646 (1983)), which a gift to a trading relative can supply (Salman v. United States, 137 S. Ct. 420 (2016)). Add Rule 10b5-1 plans, Rule 10b5-2's family relationships, Rule 14e-3 in tender offers, and § 16(b)'s strict short-swing disgorgement for officers, directors, and 10% holders.

Aim for 30 to 45 pages of master outline and a two-page attack sheet. The attack sheet is the thing you actually use. Page one is the standard-of-review flowchart: identify the actor, identify the transaction type, ask about conflicts, run the cleansing devices, land on BJR, Unocal, Revlon, Blasius, or entire fairness, and note who bears the burden at each node. Page two is a checklist of statutory sections and elements you cannot afford to forget — DGCL §§ 102(b)(7), 141, 144, 145, 203, 220, 262, 271; the 10b-5 elements; the Zuckerberg factors.

For each rule, write one sentence of holding and one sentence of why it mattered. Skip facts unless the facts are the rule (Van Gorkom's two-hour meeting, Marchand's absent food-safety committee, Broz's failure to formally present). If your professor gives closed-universe hypotheticals or a heavily policy-driven exam, add a short module on contractarian versus regulatory theories of the firm and on stakeholder-versus-shareholder primacy, with the cases you already have as anchors. Finally, test the outline before the exam: take a past hypothetical and see whether you can answer it using only the attack sheet. If you cannot, the attack sheet is missing a node, not a case.