The Ropes Recap: Mergers & Acquisition Law News - Second Quarter 2014

In this issue:

-Delaware Legislative Update

-Delaware Supreme Court Upholds Facial Validity of Fee-Shifting Provisions in Bylaws of Delaware Non-Stock Corporation

-News from the Courts:

-Court of Chancery Analyzes Allegations of Divided Loyalties Among Target Company’s Directors and Officers

-Stockholder Plaintiffs Must Allege “Extreme” Facts to Sustain Revlon Process Claims Against Disinterested Directors

-Despite Favorable Ruling, Sotheby’s Settles With Activist Investor

-Appraisal Decisions: Deal Consideration as Fair Value

-California State Court Follows Delaware on Forum Selection Clause in Bylaws

-Where Fiduciary Duties are Eliminated, Implied Covenant of Good Faith does not give GP a Duty to Disclose

-Report Shows Continued Ubiquity of Stockholder M&A Litigation

-U.S. Supreme Court Upholds Fraud on the Market -Securities Class Actions and Largely Preserves the Status Quo

-Tax News -Corporate Expatriations/Inversions Continue to be Considered by U.S. Companies

-Notable Deals

-Hillshire/Pinnacle Deal Terminated in Favor of Tyson/Hillshire Deal

-Strategic Bidder and Activist Investor Team Up to Target Allergan

-London Update

-England and Wales Court of Appeal Upholds UK Competition Commission’s Authority to Bar Transaction Between Two Non-UK Corporations


- Excerpt from Delaware Supreme Court Upholds Facial Validity of Fee-Shifting Provisions in Bylaws of Delaware Non-Stock Corporation:

On May 8, 2014, the Delaware Supreme Court sitting en banc unanimously decided ATP Tour, Inc. v. Deutscher Tennis Bund (German Tennis Federation), No. 534 (2013) (Del. May 8, 2014). The court held that fee-shifting provisions in the bylaws of a Delaware non-stock corporation are on their face valid and are enforceable against members who joined before their adoption. The Court further stated that adopting fee-shifting provisions with an intent to deter litigation would not necessarily render such bylaws unenforceable. The Court’s conclusion logically extends to Delaware stock corporations, as its analysis draws upon case law concerning Delaware stock corporations and the Delaware General Corporation Law (DGCL) and describes bylaws as a contract between a company and its investors (under which the typical American Rule that each party bear its own attorneys’ fees and costs could be modified).

Please see full newsletter below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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