Delaware General Corporation Law

News & Analysis as of

Delaware Adopts Curative Procedures for Invalid Past Corporate Actions

Business lawyers frequently face mistakes their clients make in documenting what they want to accomplish in terms of corporate actions, such as issuing stock. Clients will ask for advice years after they have delivered stock...more

Delaware Independent Director Liability in Control Buyout Cases

The Delaware Supreme Court will address the standard for pleading that an independent director has breached fiduciary duties in connection with a controlling shareholder buyout. The issue was certified for interlocutory...more

Court Of Chancery Enforces Section 273

This decision reinforces that the joint venture statute for Delaware corporations, Section 273, requires the Court to dissolve the entity upon a deadlock. Absent extraordinary circumstances amounting to a fraud...more

Choice-of-Law Agreements and Public Policy Enforceability Exception

By statute, Delaware has affirmed the ability of parties to agree to have their rights, remedies, liabilities, powers and duties governed by the law of Delaware. Originally published in the Delaware Business Court...more

When it Comes to Incorporating Your Startup, Why Delaware?!?

When you're the second smallest state and your neighbors are NYC and Philly, you have to do something to stand out. So, when Calvin Coolidge announced that the "Business of America is business," someone in Delaware was paying...more

Sinchareonkul v. Fahnemann, C.A. No. 10543-VCL (Del. Ch. Jan. 22, 2015) (Laster, V.C.)

In this memorandum opinion, the Court of Chancery denied the plaintiff’s motion for an expedited preliminary injunction hearing to be held prior to February 10, 2015, but found that good cause existed for an expedited two-day...more

Case Examines Ratification of Corporate Acts Under New Delaware Statute

The Delaware Court of Chancery explained the operation of recently adopted Sections 204 and 205 of the Delaware General Corporation Law, or DGCL, in a case captioned In Re Numoda Corporation. DGCL Sections 204 and 205...more

Recent Delaware Court of Chancery Decisions Address When A Non-Majority Stockholder Will Be Deemed a Controlling Stockholder

In three recent decisions, the Delaware Court of Chancery reiterated that under Delaware law, a large, though not majority, stockholder of a corporation will not be considered a controlling stockholder (with the attendant...more

An Overview of the Delaware Statutory Trust Act in Structured Finance Transactions

While Delaware is nationally known as the preferred jurisdiction for corporations, it is likewise recognized as a leader in the area of statutory trusts. The State of Delaware, in 1988, adopted the Delaware Business Trust...more

Delaware Statutory Trusts

Business trusts have been recognized by the Delaware common law since 1947, however, there was no express statutory recognition of the business trust in Delaware until the passage of the Delaware Statutory Trust Act...more

Delaware – The Right Choice for Business

It’s well known that Delaware is one of the most popular jurisdictions to form a new business, whether large or small. Delaware is the leading jurisdiction for publicly traded corporations listed on U.S. stock exchanges. But...more

An Overview of the Delaware Limited Liability Company Act

Delaware’s reputation as the premier jurisdiction for corporate entities is well known. In recent years, however, Delaware has also emerged as a leader in providing cutting-edge alternatives to the traditional corporate form....more

Court Of Chancery Explains Hierarchy Of Corporate Legal Principles

This is a helpful reminder that the DGCL governs what may be in the certificate of incorporation and what may be in the bylaws. Giving one director extra tie-breaking voting rights must be in the certificate to be valid....more

Delaware Supreme Court to Chancery: You Have Broad Powers

Books-and-records litigation does not typically grab headlines. In fact, few cases litigated under Section 220 of the Delaware General Corporation Law result in written opinions authored by the Delaware Supreme Court....more

Orrick's Financial Industry Week in Review

ESMA Publishes Final Technical advice on the MiFID II Directive and MiFIR - On December 19, 2014, the European Securities and Markets Authority (ESMA) published final technical advice (ESMA/2014/1569) to the European...more

Delaware Chancery Court Concludes Indemnification and Other Provisions of a Merger Agreement Are Not Enforceable Against...

In November, the Delaware Court of Chancery issued a decision that raises troubling questions about commonly used techniques in private company acquisitions and that, if not modified on appeal or through legislation, could...more

This Stockholder Would Rather Fly To Delaware Than Drive To L.A.

Yesterday’s post mentioned the recent Delaware Supreme Court decision in United Techs. Corp. v. Treppel, 2014 Del. LEXIS 608 (Del. Dec. 23, 2014). The case involved an inspection demand under Section 220 of the Delaware...more

Delaware Corporate Law And Litigation: What Happened In 2014 And What It Means For You In 2015

In This Issue: - Delaware’s Leading Role in Business and Business Litigation - Curbing Stockholder Litigation: Exclusive Forum and Fee-Shifting Provisions - Two-Tiered Poison Pill Targeted at Hedge Fund...more

Stockholder Inspections Of Delaware Corporations In California

In United Techs. Corp. v. Treppel, 2014 Del. LEXIS 608 (Del. Dec. 23, 2014), the Delaware Supreme Court held that the Court of Chancery had authority to condition a stockholder’s inspection under Section 220 of the Delaware...more

United Technologies Corp. v. Treppel, No. 127, 2014 (Del. Dec. 23, 2014)

In this en banc opinion, the Delaware Supreme Court held that the Court of Chancery has the discretionary authority under Section 220(c) of the Delaware General Corporation Law (the “DGCL”) to prohibit the inspecting...more

More Forum Selection Affirmation from Delaware

An interesting Delaware Supreme Court decision just before the holidays may have escaped many people’s attention. In United Technologies Corp. v. Treppel, the Court concluded in the context of stockholder inspection rights...more

Delaware Supreme Court Confirms Chancery Court’s Broad Authority to Impose Use Restrictions on Information Obtained From Section...

The Delaware Supreme Court reversed the Chancery Court’s decision that it lacked authority to impose the requested use restriction, noting that Section 220(c) authorizes the Chancery Court in the exercise of discretion to...more

Private Company M&A: Post-Closing Purchase Price Adjustment Provisions: New Decision Holds Some Common Mechanics Unenforceable

In private company acquisitions, it is common for the buyer to require that a portion of the merger consideration be set aside in escrow as an accessible source of funds to cover the buyer’s post-closing indemnification...more

Delaware Supreme Court Holds That Court of Chancery Can Restrict Forum Where Books and Records Can Be Used

Previously we have discussed Delaware court decisions upholding forum selection bylaws requiring suits involving a corporation’s internal affairs to be filed in a specified court, such as the Delaware Court of Chancery. Last...more

Do Post-Closing Merger Price Adjustments Comport With DGCL?

Delaware courts have routinely upheld post-closing merger price adjustments that comply with the requirements of Section 251 of the Delaware General Corporation Law. To allow stockholders to make an informed decision as to...more

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