Santa Fe Industries, Inc. v. Green

430 U.S. 462 (1988)


  • D owned 95% of Kirby corporation and sought to buy the remaining shares under Delaware’s “short-form merger” statute, which allowed a parent corporation with at a minimum 90% ownership to force minority shareholder sale of their remaining shares.
    • The DE law also required that D provide adequate notice to the shareholders, which in this case he did.
  • After being valued at $125/share by an outside firm, D offered $150/share.
  • However, that same independent firm valued Kirby’s actual assets at $640/share.
  • DE law also permits shareholders to petition the court if they believe the offer to minority shareholders is unfair.
  • However, Ps brought a federal action, arguing there was a breach of 10b-5 fiduciary duty to minority shareholders.


  • Whether there is a breach of fiduciary duty under federal 10b-5 law.


  • No, fiduciary duties are not covered under 10b-5.  10b-5 involves fraud, manipulation, omission of relevant facts, and/or deception but does not encompass breach of fiduciary responsibilities.
    • There is no record sufficient to prove that legislature intended to include fiduciary duties of shareholders in 10b-5’s scope.
    • The statute is very clearly a manipulation and deception-based law.
  • This is traditionally a state responsibility.  The states have total ability to regulate fiduciary duties and define its scope on their own.

Comments are closed.