This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Take a typical situation: a Florida-incorporated logistics company with four outside directors gets an unsolicited cash offer at a healthy premium. One director — the one who spent a career on Delaware public-company boards — announces at the next meeting that the board is now “in Revlon mode”: auction the company, hire two bankers, chase every conceivable bidder, and maximize the sale price on pain of personal liability. Half the board nods gravely. The other half wonders why a family-scale trucking business in Polk County is suddenly being run like a contested take-private in Wilmington. Both halves are reacting to the same mistake — the assumption that Delaware doctrine travels with the deal. It doesn’t. The company is a Florida corporation, its internal affairs are governed by the Florida Business Corporation Act, and Florida has never signed on to Revlon.
Revlon is Delaware law, and Florida never adopted it
Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986), is the Delaware Supreme Court decision holding that once the breakup or cash sale of a company becomes inevitable, the board’s role shifts from defending the corporate bastion to getting the best price reasonably available for stockholders — with courts applying an “enhanced scrutiny” review to how the board ran the process. Forty years of Delaware case law have refined when that duty triggers and what process satisfies it, and an entire deal-lawyer culture has grown up around it.
None of that is Florida law. Under the internal affairs doctrine, the fiduciary duties of a Florida corporation’s directors are set by Florida — the FBCA and Florida decisions — no matter where the buyer, the bankers, or the board’s Delaware instincts come from. No Florida appellate court has adopted Revlon’s enhanced-scrutiny framework, and the federal courts applying Florida law have stuck with the traditional business judgment rule; the Eleventh Circuit’s decision in International Insurance Co. v. Johns, 874 F.2d 1447 (11th Cir. 1989), reviewed golden-parachute payments under Florida’s deferential standard rather than anything resembling a value-maximization audit. Florida courts do treat Delaware decisions as persuasive when the FBCA parallels the DGCL — the two statutes share Model Act DNA — so Revlon arguments get made in Florida courtrooms. But persuasive is not binding, and on this doctrine the Florida statute doesn’t parallel Delaware. It points the other way.
Section 607.0830 asks a different question
Read section 607.0830, Florida Statutes, and notice what’s there — and what isn’t. Subsection (1) requires each director to act in good faith and in a manner the director reasonably believes to be in the best interests of the corporation. Not “the shareholders’ exit price.” The corporation. Subsection (2) sets the care standard: the attention an ordinarily prudent person in a like position would reasonably believe appropriate. Subsections (3) through (5) then do something Delaware lawyers underrate — they give directors an express statutory entitlement to rely on officers, counsel, accountants, and board committees, which is the statute’s way of saying that a director who gets a banker’s analysis and a lawyer’s advice, and has no reason to distrust either, is doing the job.
Then comes subsection (6), the provision that makes a mandatory auction duty hard to square with the text. In discharging board duties, a Florida director may consider any factors the director deems relevant, including the corporation’s long-term prospects and the effects of any action on employees, suppliers, customers, and — in the statute’s words — “the communities and society in which the corporation or its subsidiaries operate.” That’s a constituency provision, and its pedigree tells you what it’s for: it entered the FBCA in 1989, at the height of the hostile-takeover era, as part of a wave of state statutes designed to let boards say no to premium bids without breaching their duties. A statute that expressly authorizes directors to weigh employees and long-term prospects against the highest immediate offer is not a statute that silently commands short-term price maximization the moment a sale becomes likely. Florida paired it with structural takeover defenses — the affiliated-transactions and control-share statutes I covered in the post on sections 607.0901 and 607.0902 — and the package reads as a legislature choosing board discretion over auctioneering.
The liability shield does the rest of the work
Section 607.0831 narrows the stakes further. A Florida director generally has no personal monetary liability for a board decision unless a plaintiff clears one of the statute’s specific gates — a criminal violation, a transaction from which the director derived an improper personal benefit, an unlawful distribution, or, in a shareholder suit, conduct amounting to conscious disregard of the corporation’s best interest or willful misconduct. That is a demanding list. A disinterested Florida director who votes for a sale at a price a plaintiff later calls too low — after reading the banker’s book and asking real questions — is multiple statutory gates away from writing a personal check. The practical consequence: the Delaware-style stockholder class action attacking deal process for damages is a far weaker instrument against a Florida board. The minority’s real remedy in a Florida cash-out runs through a different door entirely — the appraisal statute, which I walked through in the post on section 607.1302 appraisal rights. Fair value litigation about the number, not fiduciary litigation about the process.
What a careful Florida board does anyway
Here’s where the analysis has to stay honest, because “no Revlon” is not “no duties.” First, good process is still what subsection (2) care looks like in practice. A board that informs itself — market check where sensible, a banker’s valuation analysis, disinterested deliberation, a clean record — has near-bulletproof protection under Florida’s business judgment rule; a board that shortcuts all of that is volunteering to test the outer edges of 607.0831 in front of a jury. Second, conflicts change everything. The statutory shield’s improper-personal-benefit gate and Florida’s conflict-of-interest provisions mean an insider-led buyout or a sale steered to the CEO’s preferred acquirer gets nothing like the deference a disinterested board enjoys — and that’s where Delaware’s playbook of special committees and cleansing mechanics remains the persuasive authority a Florida judge is most likely to borrow. Third, plenty of Florida companies opt into Delaware anyway: the pre-sale conversion I covered in the post on re-domesticating before a sale swaps the governing statute — and with it, the duties — sometimes because the buyer’s financing sources simply want law they know. A board that converts should understand it isn’t a paperwork step; it’s a change in the standard by which the sale itself will be judged.
Advise the statute you have
The synthesis for deal counsel is simple to state and routinely ignored. When a Florida corporation’s board weighs a sale, the governing questions are the FBCA’s: good faith, reasonable belief about the corporation’s best interests, ordinary prudence, honest reliance on advisers, and no self-dealing — with express statutory permission to think about the workforce, the customers, and the long term, not just the last dollar of the last bid. A director who wants to run an auction may absolutely run one; often it’s the prudent course. But the board that declines a premium bid to preserve the company’s independence, or takes the second-highest offer because the buyer will keep the plant open, is exercising judgment the Florida statute was written to protect. Importing Revlon into that boardroom isn’t conservatism. It’s applying the wrong state’s law — and negotiating against your own client’s discretion.
If you are a director, founder, or counsel weighing the sale of a Florida corporation, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
