Brad Sorrels at Wilson Sonsini Goodrich & Rosati

Delaware's Status as the Favored Corporate Home: Reflections and Considerations

In recent months, a conversation has emerged as to whether Delaware should remain the favored state of incorporation for business entities. Indeed, many of our clients have asked us whether they should remain in Delaware or...more

4/24/2024 / Board of Directors , California , Corporate Governance , Corporate Officers , Delaware , Delaware General Corporation Law , Franchise Taxes , Nevada , Popular , Shareholders , Texas

Recent Delaware Law Developments and Proposed Legislative Responses

The last several months have marked an extremely busy time in Delaware corporate law, with regard to decisions out of the Delaware courts, proposed legislative responses, and shifting market practices. In recent weeks in...more

4/15/2024 / Acquisitions , Board of Directors , Corporate Officers , DE Supreme Court , Delaware General Corporation Law , Fiduciary Duty , Mergers , Proposed Legislation , Shareholders , Stockholder Agreements

Delaware Court of Chancery Addresses Fiduciary Duty Claims Arising from Reincorporation to Nevada

On February 20, 2024, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery issued an opinion refusing to dismiss stockholder claims challenging the reincorporation of TripAdvisor from Delaware to Nevada and...more

2/22/2024 / Board of Directors , Business Entities , Corporate Governance , Delaware , Delaware General Corporation Law , Incorporation , Nevada , Shareholders , TripAdvisor

Delaware Court of Chancery Addresses Fiduciary Duty Claims in the Direct Listing Context

On February 1, 2024, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery issued a decision refusing to dismiss stockholder claims against directors and officers of Coinbase Global, Inc. over their sales of...more

2/9/2024 / Board of Directors , Capital Markets , Corporate Governance , Delaware , Delaware General Corporation Law , Direct Listing , Fiduciary Duty , Publicly-Traded Companies , Shareholder Litigation , Shareholders

Delaware Court of Chancery Addresses Benefit-of-the-Bargain Damages in Busted Deals and Who Can Seek Them

On October 31, 2023, in Crispo v. Musk, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery issued a decision addressing an important question that arises in mergers and acquisitions: if one of the parties...more

11/13/2023 / Acquisitions , Board of Directors , Corporate Governance , Delaware , Delaware General Corporation Law , Elon Musk , Mergers , Shareholders , Third-Party Beneficiaries , Twitter

Lessons from the 2023 Proxy Season: Advance Notice Bylaws and Officer Exculpation

With the 2023 proxy season now over for most companies, we took a fresh look at recent bylaw and charter amendments at the Silicon Valley 150 (the SV150) to better understand how companies are addressing i) new Rule 14a-19,...more

8/22/2023 / Board of Directors , Bylaws , Corporate Charters , Corporate Governance , Corporate Officers , Proxy Season , Proxy Statements , Publicly-Traded Companies , Shareholders

Delaware Court of Chancery Clamps Down on Mootness Fees for Immaterial Supplemental Disclosures

On July 6, 2023, the Delaware Court of Chancery issued an important opinion that seeks to further limit the “merger tax” imposed on many companies in the context of significant M&A transactions. The court declared that future...more

7/13/2023 / Acquisitions , Corporate Taxes , Delaware , Mergers , Mootness , Mootness Fee Applications , Supplemental Disclosures

Delaware Court of Chancery Issues Decision on Disney Board’s Obligations in the DeSantis Dispute

On June 27, 2023, Vice Chancellor Lori Will of the Delaware Court of Chancery issued a much-anticipated decision addressing the obligations of the board of directors of The Walt Disney Company (Disney) in overseeing Disney’s...more

6/30/2023 / Board of Directors , Books & Records , Delaware General Corporation Law , Disney , Environmental Social & Governance (ESG) , Fiduciary Duty , Florida , Gay Rights , Governor DeSantis , Shareholder Litigation , Shareholders

Delaware Court of Chancery Issues Important Ruling for Multi-Class Companies Addressing Class Votes

Earlier today, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery issued an important ruling concluding that two companies with multiple classes of common stock were not required, under the Delaware statute,...more

3/30/2023 / Board of Directors , Corporate Governance , Corporate Officers , Delaware General Corporation Law , Shareholder Litigation , Shareholder Rights , Shareholders , Voting Rights

In Rare Decision, Delaware Court of Chancery Imposes Liability on CEO and Acquiror Post-Trial

On March 15, 2023, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery issued a rare post-trial decision finding a CEO personally liable for millions of dollars in damages for breaching his fiduciary...more

3/22/2023 / Board of Directors , Breach of Duty , Corporate Counsel , Corporate Officers , Delaware General Corporation Law , Directors , Fiduciary Duty , Shareholder Litigation , Shareholders

Delaware Court of Chancery Concludes That Duty of Oversight Applies to Officers

In an important decision addressing an issue of first impression, the Delaware Court of Chancery determined that corporate officers owe a fiduciary duty of oversight under Delaware law. The case, In re McDonald’s Corporation...more

2/1/2023 / Board of Directors , Breach of Duty , Corporate Governance , Corporate Officers , Delaware General Corporation Law , Fiduciary Duty , Sexual Harassment , Shareholder Litigation , Shareholder Rights , Shareholders

Reminders for Preparing the Annual Report on Form 10-K

Management’s Discussion and Analysis (MD&A). MD&A rules require companies to “describe any known trends or uncertainties that have had or that are reasonably likely to have a material favorable or unfavorable impact on net...more

12/15/2022 / Corporate Governance , Disclosure Requirements , Financial Statements , Form 10-K , Geopolitical Risks , MD&A Statements , Non-GAAP Financial Measures , Publicly-Traded Companies , Regulatory Oversight , Securities and Exchange Commission (SEC)

Glass Lewis and ISS Issue 2023 Updates

On November 17, 2022, Glass Lewis released its 2023 U.S. Policy Guidelines (U.S. Guidelines) and its 2023 ESG Initiatives Policy Guidelines (ESG Guidelines), effective for shareholder meetings on or after January 1, 2023. On...more

12/14/2022 / Board of Directors , Climate Change , Corporate Governance , Diversity , Environmental Social & Governance (ESG) , Glass Lewis , Institutional Shareholder Services (ISS) , Proxy Season , Proxy Voting Guidelines , Publicly-Traded Companies , Shareholders

How to Navigate the Decision of Exercising Drag-Along Rights During an M&A Process

During an M&A process, the seller and its stockholders may consider whether it would be beneficial to exercise any drag-along rights under its stockholder agreements or equity plans. Drag-along rights generally allow a subset...more

9/27/2022 / Acquisitions , Board of Directors , Equity Plans , Mergers , Shareholder Litigation , Shareholder Rights , Shareholders

Delaware Court of Chancery Blesses MFW Process and Dismisses Challenge to Stockholder-Approved Charter Amendment Extending...

On July 29, the Delaware Court of Chancery issued a noteworthy decision confirming the broad application of the "MFW" framework—based on the Delaware Supreme Court's decision in Kahn v. M & F Worldwide Corp., 88 A.3d 635...more

8/3/2022 / Board of Directors , Bylaws , Corporate Charters , Corporate Counsel , Corporate Governance , Corporate Officers , DE Supreme Court , Delaware General Corporation Law , Shareholder Litigation , Shareholders

2021 Delaware Corporate Law and Litigation Year in Review

We are pleased to present the 2021 Delaware Corporate Law and Litigation Year in Review. A number of Delaware law and related corporate governance developments occurred in 2021 that should be of significant interest to...more

1/27/2022 / Board of Directors , Corporate Counsel , Corporate Governance , DE Supreme Court , Delaware , Delaware General Corporation Law , Publicly-Traded Companies , Shareholders

Delaware Court of Chancery Addresses Outside Director’s Use of Another Entity’s Email Account for Board Communications

The Delaware Court of Chancery recently addressed whether an outside director’s use of another entity’s email account would require the director to turn over emails from that account in stockholder litigation relating to his...more

10/5/2021 / Board of Directors , Corporate Communications , Corporate Counsel , Corporate Governance , Delaware , Delaware General Corporation Law , Email , Email Policies , Publicly-Traded Companies , Shareholders

Delaware Supreme Court Eliminates Gentile Dual Natured Claims

On September 20, 2021, the Delaware Supreme Court overruled its 2006 decision in Gentile v. Rossette, eliminating so-called "dual natured" simultaneous direct and derivative claims for breach of fiduciary duty. The decision...more

9/24/2021 / Board of Directors , C-Suite Executives , Controlling Stockholders , Corporate Governance , Corporate Officers , DE Supreme Court , Fiduciary Duty , Shareholder Litigation

Delaware Supreme Court Enforces Waiver of Statutory Appraisal Rights

Earlier this week, the Delaware Supreme Court issued a significant decision reinforcing Delaware's strong policy favoring private ordering and giving effect to agreements among sophisticated stockholders. The decision...more

9/17/2021 / Appraisal Rights , Board of Directors , Controlling Stockholders , Corporate Governance , Corporate Officers , DE Supreme Court , Delaware General Corporation Law , Directors , Fiduciary Duty , Shareholder Litigation

Chancellor McCormick Provides Helpful Guidance on Pre-Suit Litigation Demands Under Delaware Law

Last month, Delaware's new Chancellor Kathaleen S. McCormick issued a decision largely dismissing challenges to board action after finding that the plaintiff's emails to the board constituted pre-suit litigation demands, and...more

7/7/2021 / Board of Directors , Corporate Counsel , Corporate Governance , Derivative Complaint , Derivative Suit , Derivatives , Pre-Suit Notice , Shareholder Litigation , Shareholders

"Bad" v. "Bad-Faith" Oversight: Navigating the Risks of Potential Oversight Liability Following Marchand v. Barnhill

In June 2019, the Delaware Supreme Court issued a decision that signaled a potential departure from the court’s existing thinking on oversight liability for boards of directors. The court in Marchand v. Barnhill held that a...more

3/1/2021 / Board of Directors , Caremark claim , Delaware , Food Manufacturers , Food Safety , Food Service Workers , Liability

Delaware Court of Chancery Orders Facebook to Produce Books and Records, Including Emails, but Not Attorney-Client Privileged...

Earlier this month, the Delaware Court of Chancery added to a string of significant recent decisions under Section 220, Delaware's books and records statute, this time addressing when a company may be required to provide...more

3/1/2021 / Data Protection , Data Security , Delaware , Facebook , Popular , Social Media , Social Media Policy

Delaware Supreme Court Issues Key Decision Addressing Stockholders' Rights to Access Books and Records Under Section 220 of...

Last week, the Delaware Supreme Court issued a key decision addressing stockholders' rights to access books and records under Section 220 of the Delaware General Corporation Law. Because the Supreme Court rarely weighs in on...more

12/18/2020 / Board of Directors , Books & Records , Breach of Duty , Corporate Counsel , Delaware General Corporation Law , Fiduciary Duty , Shareholder Litigation , Shareholders

Delaware Court of Chancery Addresses Effects of Pandemic on Material Adverse Effect Provision and Ordinary Course Covenants in...

On November 30, 2020, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery issued a post-trial decision addressing contractual issues related to the effects of the COVID-19 pandemic on the sale of a collection...more

12/10/2020 / Acquisitions , Corporate Governance , Delaware , Enforcement Actions , Mergers , Securities Litigation

Delaware Court of Chancery Limits Application of California Books and Records Statute to Delaware Corporations Under the Internal...

On August 13, 2020, the Delaware Court of Chancery issued an opinion, JUUL Labs, Inc. v. Grove, C.A. No. 2020-0005-JTL (Del. Ch. Aug. 13, 2020), holding that a stockholder of a Delaware corporation headquartered in California...more

8/17/2020 / Corporate Governance , Misrepresentation , Securities Fraud , Securities Litigation , Shareholder Litigation

Brad Sorrels

Wilson Sonsini Goodrich & Rosati

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