Defective Corporate Acts

News & Analysis as of

Court Of Chancery Holds Section 205 Is Limited To Validating Action

In a case of first impression, the Court holds that Section 205 of the DGCL can only be used to validate defective corporate actions, not to declare an action invalid. While a similar claim might be made in a Section 225...more

Delaware General Corporation Law Amendments

On June 24, 2015, Delaware Governor Jack Markell approved several important amendments to the Delaware General Corporation Law (the “DGCL”),[1] with such amendments generally becoming effective on August 1, 2015. These...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

In re Numoda Corp. S’holders Litig., C.A. No. 9163-VCN (Del. Ch. Jan. 30, 2015) (Noble, V.C.)

In this memorandum opinion, the Court of Chancery exercised its powers under 8 Del. C. § 205 to resolve various disputes regarding the capital structure of two corporations, Numoda Corporation (“Numoda Corp.”) and Numoda...more

Amendments to Delaware General Corporation Law Allow Delaware Corporations to Ratify Defective Corporate Acts

Effective April 1, 2014, the Delaware General Corporation Law (“DGCL”) has been amended to include new Sections 204 and 205 that will provide Delaware corporations with an avenue to cure certain defective corporate acts,...more

DGCL Sections 204 and 205 Go Into Effect April 1, 2014

Tomorrow, on April 1, 2014, some potentially important new provisions in the Delaware General Corporation Law (the DGCL) will go into effect....more

Applying a Legal Bandaid to Defective Acts: Delaware Law Creates New Procedures to Ratify Defective Corporate Acts

On June 30, 2013, the State of Delaware amended the Delaware General Corporations Law (the “DGCL”) to include two new sections, Section 204 and Section 205 (together, the “Ratification Provisions”). Set to take effect on...more

Delaware Law to Provide for Ratification of Defective Corporate Acts as of April 1, 2014

It is quite common during the course of legal due diligence to discover that a target company has issued more stock than it had legally authorized through its certificate of incorporation. Many companies, particularly...more

Recent Delaware Decision Highlights Importance of Formalities in Issuing Stock and Potential Utility of New Statutory Ratification...

Late last year, Vice Chancellor John Noble of the Delaware Court of Chancery issued a decision in Boris v. Schaheen that highlights the importance of following formalities when issuing stock. The decision found an array of...more

2013 Changes to Delaware Corporate and LLC Law

In this alert we summarize the most important recent additions and amendments to the Delaware General Corporation Law (the “DGCL”) and the Delaware Limited Liability Company Act (the “DLLCA”). These changes include...more

New Amendments to Delaware Law Impacts Mergers and Defective Corporate Acts

Delaware recently passed amendments to its General Corporation Law, which will impact corporate and acquisition rules for the automotive industry. The amendments add several new provisions to the DGCL, including provisions...more

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