Asset Sales: Defining "All or Substantially All"

Summary

This practice note discusses the definition of "all or substantially all" in the context of an asset purchase and whether shareholder consent is required as a result under Delaware and New York law. This practice note also discusses how other states have addressed this topic as well. Generally, the shareholders of the seller must approve any asset sale in which the assets being sold constitute "all or substantially all" of the assets of the corporation. A sale of less than all or substantially all of the corporation's assets, however, is generally within the discretion of the board of directors as part of their operation of the corporation.