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Signed into law by President Bush on July 30, 2002, the Sarbanes‐Oxley Act of 2002 (the Act) presents what may be among the most sweeping set of changes to U.S. federal securities laws since the New Deal. Designed to address widespread outrage and waning investor confidence resulting from a series of financial meltdowns, earnings restatements, and other corporate and accounting abuses, the Act is in many ways unprecedented. For example, in addition to regulating disclosure and securities trading, the traditional jurisdiction of U.S. federal securities laws, the Act also addresses matters of substantive corporate governance and executive fiduciary responsibility, such as loans to officers and directors, management oversight, director due diligence, and executive compensation, as well as professional responsibilities of external auditors and attorneys, areas traditionally left to the states and self regulatory organizations (SROs) such as the NYSE, AMEX, and NASDAQ. The Act is complex, with over 70 sections, and will present numerous challenges to corporate executives, financial officers, and professional service providers. What’s more, given the pace with which the Act was pushed through the conference committee process and adopted by Congress, various inconsistencies and ambiguities already have emerged and will continue to do so. The Act certainly will receive the prompt attention of the Securities and Exchange Commission (SEC) as it promulgates the many regulations required to implement the Act’s broad‐based mandate. This article presents a number of key aspects of the Act that we believe are of most immediate concern to corporate executives and directors of corporations and financial institutions.

After a series of recent Delaware Chancery Court and Delaware Supreme Court decisions and the standard of judicial review applied in challenges to “going‐private” transactions, controlling stockholders seeking to privatize their subsidiaries may be induced to do so by means of a two‐step acquisition (i.e., unilateral tender or exchange offer, followed by a short‐form merger) instead of a negotiated, single‐step merger. That said, there are a range of practical considerations for public M&A advisors in the wake of these decisions that may not necessarily make the two‐step method the “be all and end all” approach. In any case, there is an incongruity in Delaware’s common law, which is policy‐driven and, to some degree, formalistic, and which may no longer be as defensible today as it once may have been. Accordingly, a critical review of the applicable Delaware precedents and, ultimately, the reversal or modification thereof, seems appropriate at this time.

This article addresses, in the third‐party acquisition context, how a series of U.S. Circuit Court of Appeals and District Court decisions have chilled the use of tender offers as an expedient, and often the optimum, method of business combination or sale of control. These decisions have disparately construed the applicability of the SEC’s “all holders‐best price” rule (contained in the federal tender offer regulations) to an increasing variety of compensatory and other management payment arrangements which, while often incidental and certainly related to the tender offer, may not necessarily have been intended as deal consideration paid to the recipients. Until there is resolution by the U.S. Supreme Court or definitive guidance from the SEC on the ambit of Rule 14d‐10, expedient and less costly tender offer structures are yielding to single‐step mergers. This is not always the best result for stockholders.