Hostile takeovers in the face of the Business Judgment Rule : A comparative analysis between Sweden and the United States of America in regard to the Business Judgment Rule and the Unocal test.

Abstract: In cases concerning a hostile takeover occurring in the United States, the board of directors must fulfill the duties set forward by the Unocal test. If the board of directors succeed, it implies that the decision, regardless if it is a bad decision, is protected by the Business Judgment Rule. The Business Judgment Rule presumes that the board of directors in good faith made an informed decision in the line of the corporations’ interests. The Business Judgment Rule is inherently unique for American companies. In Sweden liability for directors is based on a culpa evaluation which in turn is based on principles deriving from tort law. This is the result from the corporate law only providing for a very limited part concerning liability. In this thesis, the different judicial systems are explained with focus on differences and similarities based on duties of the board. Moreover, the different liabilities from a Swedish and an American perspective will be discussed. Concluding, it is hard to distinguish a Swedish version of the Business Judgment Rule, however, the creation of one would most likely be beneficial since it, to a large extent, provides for a better business world.