Bylaws

News & Analysis as of

The Court of Chancery Declines to Disturb Company’s “Waiver” of its Forum Selection Bylaw to Settle Derivative Action in...

Many Delaware companies have adopted forum selection bylaws that prevent their stockholders from bringing internal corporate claims in courts outside of Delaware. These bylaws are a valid and effective tool for limiting...more

SEC Begins to Define “Substantial Implementation” Under Proxy Rule 14a-8(i)(10)

The SEC has recently provided guidance on the permissibility of excluding shareholder proxy access bylaw proposals under Proxy Rule 14a-8(i)(10). Rule 14a-8(i)(10) allows a company to exclude a shareholder proposal that has...more

Help Your Clients with Spring Cleaning

As the weather warms, I find myself wanting to do household spring-cleaning chores while also dreading the effort. I long for a day to pack away winter coats and make room for lighter, brighter clothes in the closet, to...more

SEC Releases Additional No-Action Letters on “Substantial Implementation” of Shareholder Proxy Access Proposals

In the last year, the number of companies that have adopted proxy access bylaws provisions – and the number of proxy access proposals submitted by shareholders – has risen significantly. Competing proxy access provisions...more

The Regulator Knows Best: British Columbia Court of Appeal Upholds Bylaws Prohibiting Customer Incentive Programs

In Sobeys West Inc. v. College of Pharmacists of British Columbia, 2016 BCCA 41, the British Columbia Court of Appeal determined that it was reasonable for the College of Pharmacists to prohibit pharmacists from using...more

Companies Accelerate Adoption of Proxy Access as SEC Continues to Grant No-Action Relief

As we previously reported here, companies that adopted mainstream proxy access bylaws received a vote of confidence from the SEC when the agency issued a series of no-action letters allowing companies to exclude related...more

Simply Because a Provision is in the Charter or Bylaws Does Not Necessarily Mean it is Enforceable

The recent Delaware case of In re Vaalco Energy, Inc. Stockholder Litigation (December 21, 2015) is a reminder to practitioners that provisions in the certificate of incorporation (or charter) and bylaws of a Delaware...more

Local Wetlands Bylaw Decision Survives Pre-emption Challenge

The Massachusetts Appeals Court has again upheld the validity of a local conservation commission’s ruling under a local wetlands bylaw notwithstanding that the commission’s partial reliance on the State Wetland Protection Act...more

Court Of Chancery Denies Advancement Until Undertaking Executed

This decision states what should be obvious — you do not get your expenses advanced until you undertake to repay them if you lose....more

Proxy Access Shareholder Proposals: SEC Staff Responds to Requests to Exclude on “Substantially Implemented” Grounds

The staff of the SEC Division of Corporation Finance has posted on its website 18 no-action letters related to requests for exclusion of proxy access shareholder proposals from proxy statements. The SEC staff granted relief...more

DELAWARE CORPORATE LAW AND LITIGATION: WHAT HAPPENED IN 2015 AND WHAT IT MEANS FOR YOU IN 2016

Delaware has long been known as the corporate capital of the world, and it is now the state of incorporation for 66 percent of the Fortune 500 and more than half of all companies whose securities trade on the NYSE, Nasdaq...more

Amendments to the General Law of Commercial Companies

Creation of the Simplified Shares Corporation (Sociedad por Acciones Simplificada or "SSC") - On February 9, 2016, the Mexican Congress approved amendments (the "Reform") to the General Law of Mexican Companies (Ley...more

Court Of Chancery Explains Section 115

Bonanno v. VTB Holdings Inc., C.A. 10681-VCN (February 8, 2016) - Section 115 of the Delaware General Corporation Law addresses forum selection provisions in corporate charters or bylaws....more

Rodeo Associations Fail to Wrangle Each Other in First Round of Antitrust Class Action: District Court Denies Plaintiffs’...

An upstart rodeo association, created and owned by professional rodeo cowboys, challenged that its competitor’s bylaws aimed at the new association and its participants constituted agreements that unreasonably restrain trade...more

How to Answer When an Activist Calls

The increasing activist stockholder demands upon boards of directors call for careful responses. The recent Delaware Court of Chancery decision In re Ebix Stockholder Litigation, C.A. No. 8526-VCN (Del. Ch. Jan. 15, 2016),...more

Court Of Chancery Explores The Effect Of Federal Settlements On A Delaware Action And Applies Unocal To Bylaw Amendments

First, the Court explores the effect settlement agreements in two federal court actions might have on claims in a Delaware action. The decision holds that the settlements did not release the Delaware plaintiffs’ derivative...more

"Enforceability of Corporate Forum-Selection Bylaws Continues to Strengthen"

In recent years, corporations have responded to the threat of duplicative stockholder lawsuits in multiple courts across the country, as well as “forum shopping” by plaintiffs, by enacting forum-selection bylaws. Under these...more

5 Securities Litigation Issues to Watch in 2016

The coming year promises to be a pivotal one in the world of securities and corporate governance litigation. In particular, there are five developing issues we are watching that have the greatest potential to significantly...more

Shaev v. Adkerson, C.A. No. 10436-VCN (Del. Ch. Oct. 5, 2015) (Noble, V.C.)

In this memorandum opinion, the Court of Chancery granted defendants’ motion to dismiss plaintiff’s claims that in granting one million restricted stock units, defendants, the board of directors of a corporation, violated its...more

Chancery Court Confirms that the Removal of Directors Serving on Unclassified Boards and Elected by Plurality Voting Cannot Be...

In In re VAALCO Energy, Inc. Consolidated Stockholder Litigation, C.A. No. 11775 VCL (Del. Ch. Dec. 21, 2015) (Transcript), the Delaware Court of Chancery confirmed that the certificate of incorporation or bylaws of a...more

Forum Shopping No More? Oregon Joins Delaware in Upholding Exclusive Forum Bylaw Provision

On December 10, 2015, the Oregon Supreme Court held that an exclusive forum bylaw provision adopted unilaterally by a Delaware company’s board was a valid and enforceable contractual forum selection clause.  Importantly, the...more

M&A Update: Delaware Chancery Court Invalidates Charter and Bylaw Provisions Allowing Only For Cause Removal of Directors Where...

In a December 21, 2015 transcript ruling, the Delaware Chancery Court invalidated the provisions of VAALCO Energy, Inc.’s charter and bylaws that allow for removal of directors only “for cause” even though VAALCO’s board is...more

But Everybody’s Doing It: Delaware Chancery Court Invalidates VAALCO’s “Wacky” Charter and Bylaws Provisions Despite Use by Other...

Ruling from the bench on dueling motions for summary judgment just days before a special meeting of shareholders was to be held, on December 21, 2015, Delaware Vice Chancellor J. Travis Laster invalidated certain provisions...more

Oregon Supreme Court Upholds Delaware Corporation’s “Exclusive-Forum” Bylaw

In Roberts v. TriQuint Semiconductor, Inc., 358 Or. 413, __ P.3d ___, 2015 WL 8539902 (Dec. 10, 2015), the Oregon Supreme Court unanimously held that a Delaware corporation’s “exclusive-forum” bylaw, which required that all...more

New ASC Requirements Coming in 2016

SB 396 (Hill) becomes effective on January 1, 2016, adding new patient protection measures to the current regulation of ambulatory surgery centers (“ASCs”). First, SB 396 authorizes accreditation organizations to perform...more

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