Revlon rule

noun

Definitions of Revlon rule

English

(US) a requirement that a company's board of directors must act in the best interests of shareholders if the company is to be sold

The Revlon rule, based on the decision in Revlon v. MacAndrews & Forbes, suggests that where a target is about to be sold, the issue before the directors no longer is whether the company should be sold at all but how to obtain the best deal possible for the shareholders.