The Omnipresent Specter of Omnicare
In this Article, written for a symposium commemorating the tenth anniversary of the Delaware Supreme Court’s opinion in Omnicare, Inc. v. NCS Healthcare, Inc., I argue, notwithstanding reports to the contrary, that Omnicare is still very much with us. Although there is a line of cases that qualifies the narrow holding of the opinion, the strong reading of Omnicare, which requires a fiduciary out in every merger agreement and elevates the “unremitting” duty to remain “fully informed” to an absolute jurisprudential principle, lives on in Delaware law, animating the Court of Chancery’s controversial rulings in the recent standstill cases. Shifting from descriptive to normative, the Article argues that Omnicare’s survival is regrettable because it introduces inconsistencies into the fundamental structure of corporate law. Finally, this Article offers a way out of the doctrinal bind by articulating an approach to enhanced scrutiny that would allow courts both to police justifiable concerns regarding strong deal protections while also preserving the ability of boards to act in shareholders’ best interests. Although this approach to enhanced scrutiny would require a revision of some aspects of Delaware doctrine, on the whole it does considerably less violence to the basic structure of corporate law than the majority opinion in Omnicare currently does.