02.03.2009 Ehrenhaus v. Baker, 2008 NCBC 20 (N.C. Super. Ct. Dec. 5, 2008) NC Bar Association Business Section Newsletter; Vol. 30, No. 2
Reproduced with the express and limited permission of the North Carolina Bar Association. All rights reserved.

September 2008 will be remembered for the quick succession of events that began with the federal government's takeover of Fannie Mae and Freddie Mac and ended with the near collapse and ultimate sale of Wachovia, one of North Carolina's largest institutions. Although the financial sector was in severe tumult and the Wachovia board was faced with a set of extraordinary circumstances, Judge Diaz of the North Carolina Business Court reaffirmed in Ehrenhaus v. Baker, 2008 NCBC 20 (N.C. Super. Ct. Dec 5, 2008), several key North Carolina corporate law principles: namely that the fiduciary duties boards must exercise, even in the face of extraordinary circumstances, remain unchanged and that while boards are responsible for strategy and negotiating mergers, shareholders retain the right to ultimately vote on any transaction in any un-coerced manner.

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