Janet E. Kerr

Document Type




This Article explores these questions and more with respect to the current role the government is playing in three corporations—Bank of America, General Motors, and Citigroup— and the relevant issues raised within corporate law. Specifically, this Article discusses whether boards of directors may have acted in such a way that potentially breaches traditional fiduciary duties—duties of due care, loyalty, and good faith—and whether the business judgment rule still protects these boards when they were pressured by the government. Furthermore, this Article also explores whether there were violations under Rule 10b-5 of the Securities Exchange Act of 1934, the duty of candor required in Delaware, and the duty of fairness. This Article also analyzes the duties the government owes fellow shareholders when it acts as either a majority or controlling shareholder and addresses the idea that the U.S. government may be beginning to engage in what many foreign governments already utilize, the golden share. Part I discusses the financial crisis of 2008 with respect to Bank of America, General Motors, and Citigroup. Part II summarizes the traditional triad of fiduciary duties owed by, and legal protections provided to, boards of directors under common law. Part III details the fiduciary duties owed by directors to shareholders under the duty of candor in Delaware. Part IV discusses additional relevant laws and issues, including Rule 10b-5, the duty of directors to be fair to all shareholders, and the duty of loyalty owed by majority and controlling shareholders to minority shareholders. Part V analyzes all the legal implications of the financial crisis of 2008 with respect to the three profiled companies.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.