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The Book of Jargon Series – Word of the Day®

The Book of Jargon® is a series of practice area and industry-specific glossaries published by Latham & Watkins.

Duty of Candor

  1. (US) a US Fiduciary Duty of directors under Delaware judicial decisions that requires the Board of Directors to provide shareholders with all the material information necessary in order to decide how to vote on a matter. The Delaware courts have defined materiality using the same definition as the Supreme Court pronounced in the Northway case. Accordingly, at least in theory, compliance with the Duty of Candor requires the same disclosure as the Federal Securities laws.
  2. (UK) similar to a UK director’s duty to avoid a situation in which one has, or may have, a direct or indirect interest which conflicts, or may conflict, with the interests of the company. The duty is contained in Section 175 of the UK Companies Act. A conflicted or potentially conflicted director will not be considered to have breached his/her duty to avoid conflicts of interest if (i) the situation cannot reasonably be regarded as likely to give rise to a conflict or (ii) if directors who are genuinely independent have authorized the conflict, where such authorization is permitted under the company’s Articles of Association. See also Directors’ Duties.
  3. (ESP) directors may not, for their own benefit or for that of their related persons, make investments or engage in any transactions involving company property which the directors have learned about as of result of the performance of their duties. Directors must declare to the Board of Directors and/or the general meeting any situation of indirect conflict they may have with the interest of the company (articles 228 and 229 of the Spanish Companies Act).
  4. (FRA) there is no legal definition of Duty of Candor under French law. However, the Corporate Governance Codes provide that directors should inform the Board of Directors of any existing or potential conflicts of interests and should refrain from resolving on any matters in which they have an interest.
  5. (SGP) the Companies Act of Singapore requires directors to disclose certain information to a company. For instance, Section 156 of the Companies Act of Singapore requires directors to disclose their interests (whether direct or indirect) in transactions or property with the company. Section 165(1) requires directors to disclose particulars of Interests In Shares, Debentures, participatory interests, Rights, Options and contracts as are necessary to maintain the register of directors’ shareholdings.

Word of the Day®

Squeeze Out Merger

a Merger or other transaction that eliminates minority shareholders in a company for cash, resulting in the majority shareholder becoming the sole owner of the company. Squeeze Out Mergers may, but do not always, take the form of Short Form Mergers.

Word of the Day®

Prospectus

a marketing document included in the Registration Statement filed with the SEC that registered or public offerings are effected through. Plural is “Prospectuses.”

Word of the Day®

Bad Faith

generally means dishonest and/or otherwise intentionally unacceptable behavior without justification and/or with an intent to deceive or disrupt, although the precise meaning varies with the Applicable Law and is sometimes defined by contract. Bad faith can also relate to a party’s conduct in the Arbitration including with respect to its procedure.

Word of the Day®

Blue Water

fresh surface and groundwater, such as the water in freshwater lakes, rivers, and Aquifers. In a marine context, Blue Water refers to the deep blue ocean or open sea.

Word of the Day®

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