Board of Directors Shareholders

News & Analysis as of

Calma v. Templeton, C.A. No. 9579-CB (Del. Ch. Apr. 30, 2015) (Bouchard, C.)

In this opinion, the Court of Chancery denied a motion to dismiss a claim challenging grants of compensation to non-employee directors pursuant to a compensation plan that had been approved prospectively by stockholders. The...more

Client Alert on New Rules on Related Party Transactions for all Azerbaijani Companies

Following recent amendments to the Civil Code, effective from 24 May 2015, new regulations on related party transactions now extend to all Azerbaijani legal entities. Previously, similar regulations existed only for...more

Blog: Delaware Chancery Court Applies Entire Fairness Standard Of Review To Director Compensation

What is the judicial standard of review applicable to an award of compensation by directors to directors under an equity incentive compensation plan that has been approved by the shareholders? That was the question before...more

"Proxy Access: The 2015 Proxy Season and Beyond"

Although the 2015 annual meeting season is still winding down, there is no doubt that proxy access has gained considerable momentum and will remain a front-and-center corporate governance issue for the foreseeable future. For...more

Closely-Held Shareholder Derivative Actions are Alive and Well in Texas

After 30 years of running his family-owned business, Hillbilly Oil Co., Jed Clampett decided to retire in 2013. The board of directors elects Jethro Bodine as Hillbilly’s President and Elly May as Vice President. Both Jethro...more

Preparing a Company to Deal With Activist Investors [Video]

It does not matter whether a company is approached by a single activist investor or a group of activist hedge funds, a company and its board should have a strategy prepared. In this video, Foley Partner Deepak Nanda discusses...more

Before Rapunzel There Was Rudabeh

In Koehler v. NetSpend Holdings, Inc., 2013 Del. Ch. LEXIS 131 (Del. Ch. May 21, 2013), Vice Chancellor Sam Glasscock III wrote “In fact, NetSpend appears more Rapunzel than Penelope; she must, it seems, let down her hair or...more

2015 Nevada Business Entities Law Update

The 78th Session of the Nevada Legislature made a number of changes to provisions of Title 7 of the Nevada Revised Statutes (NRS) governing business entities, including corporations, limited liability companies and limited...more

“Dead Hand Proxy Puts” Garner Increased Stockholder Scrutiny In Delaware

A ruling last fall by the Delaware Chancery Court has prompted a wave of 8 Del. C. § 220 books and records inspection demands on (and threatened litigation against) Delaware corporations that have entered into credit...more

Dead Hand Proxy Puts Face Continued Scrutiny

"Dead hand proxy puts’’ have emerged as the target du jour for entrepreneurial plaintiffs counsel litigating corporate governance claims. Since last fall, at least seven separate actions have been filed in the Delaware Court...more

M&A Team News - April 2015

What Revlon Doesn't Require - Two decisions by the Delaware courts (In re Family Dollar Stores, Inc. and C&J Energy Services Inc. v. City of Miami General Employees' and Sanitation Employees' Retirement Trust have more...more

Violation of Corporate Charter: Breach of Contract, Fiduciary Duties or Both

When a company takes action through its board in violation of its certificate of incorporation, may a plaintiff stockholder bring suit against the company directly for breach of its certificate—the most important of corporate...more

Delaware court of chancery issues significant ruling on the ability of creditors to assert fiduciary duty claims against...

In Quadrant Structured Products Co. v. Vertin, 2015 WL 2062115 (Del. Ch. May 4, 2015), the Delaware Court of Chancery (Vice Chancellor J. Travis Laster) announced a bright-line standard governing the threshold inquiry of when...more

Southeastern Pennsylvania Transportation Authority, v. AbbVie, Inc., CA No. 10374-VCG and Rizzolo v. AbbVie Inc., CA No. 10408-VCG...

In this memorandum opinion, the Court of Chancery denied two stockholders’ request for the inspection of books and records of a company pursuant to 8 Del. C. § 220, finding that the stockholders failed to show a credible...more

Delaware Court Limits Stockholder Ratification Defense for Derivative Claim Challenging Director Compensation - Court Permits...

In Calma v. Templeton, et al., C.A. No. 9579-CB, (Del. Court of Chancery, April 30, 2015), the stockholders of Citrix Systems, Inc. (the “Company” or “Citrix”) had previously approved a compensation plan with few limits;...more

SEC Commissioner Stein On “Short-termism” and Corporate Boards

Two issues of continued importance to shareholders and the U.S. capital markets were recently discussed by SEC Commissioner Kara Stein. One the Commissioner called “short-termism” while the other focuses on the composition of...more

Protect Your Corporate Veil

One of the advantages of operating a business in corporate form is the protection a corporation provides to its shareholders from exposure to the corporation’s liabilities. ...more

Performance Based Equity Compensation [Video]

In this video clip, Pam Greene discusses the reasons behind the shift to performance-based equity compensation, how it differs from fixed equity compensation, and what executive boards need to consider when structuring...more

Business Court Denies TRO In The Midst of A Proxy Fight

The Defendant in Allcorn v. Bradley Creek Boatominium, Inc. sought an injunction against the Plaintiffs in the midst of a proxy fight as to their allegedly defamatory statements in connection with the election of the...more

Cybersecurity Breach: Are Board Members at Risk?

It seems a month does not pass in which some sort of breach of confidential data of a business is not announced to the public. With the increase in cybersecurity breaches, so increases board members’ exposure to litigation...more

SEC Charges Directors, Officers and Major Investors for Failing to Update Disclosures Prior to Announcements of Going Private...

On March 13, 2015, the U.S. Securities and Exchange Commission announced settlement proceedings against officers, directors, and major shareholders of several companies that were recently taken private for failing to update...more

Wannabe Derivative Plaintiffs of Delaware Corporations Cannot Skirt Delaware Law By Filing Suit in California

It is well-established that a shareholder-plaintiff may not assert derivative claims against a corporation’s officers or directors unless he or she makes a pre-suit demand on the corporation’s board of directors and alleges...more

Sixth Circuit Warns Boards Not to Blow Off Notice of Shareholder Proposals

A recent Sixth Circuit decision indicates that company boards should proceed cautiously in providing notice of shareholder meetings, particularly where a dissident shareholder is expected to offer a resolution. ...more

Delaware Court of Chancery Restricts Board’s Ability to Subject Former Shareholders to New Bylaws

The Delaware Court of Chancery recently held, in a case of first impression, that a non-reciprocal fee-shifting bylaw cannot be applied to a claim brought by a former shareholder who had been cashed out of the company before...more

More “Broken Windows”: SEC Charges Schedule 13D Filers with Disclosure Violations for Failing to Update Ownership Reports

When a significant stockholder in a publicly-held company is considering plans to take the company private, how soon must the stockholder disclose those plans in a Schedule 13D filing?...more

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