AMC Merger Case Prompts Nevada Justices to Update Fiduciary Duty

AMC Networks Inc. and the board of a DVD maker it acquired in 2018 defeated a challenge to the deal, when Nevada’s top court ruled for the first time that fiduciary breach claims in the state aren’t viable unless they allege intentional misconduct, fraud, or legal violations.

Although Nevada’s justices previously subjected mergers involving “interested parties” on a corporate board to the investor-friendly “inherent fairness” standard, that ruling was overturned by a law imposing the board-friendly “business judgment” rule on most deals, a divided state supreme court said.

The statute “plainly requires the plaintiff to both rebut the business judgment ...