Delaware General Corporation Law

News & Analysis as of

2014 Changes to Delaware Corporate Law

Earlier this month, several significant amendments to the Delaware General Corporation Law (the DGCL) were approved. These amendments are substantially the same as the amendments originally proposed in April 2014 and will...more

2014 Amendments to the Delaware General Corporation Law

On July 15, 2014, Delaware Governor Jack Markell signed Delaware House Bill No. 329, which makes a number of noteworthy changes to the Delaware General Corporation Law. The 2014 amendments address: (1) mergers under DGCL...more

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...more

Recent Practical Effects of “Just Saying No”

In the past few months, we have seen an increasing number of hostile or unsolicited M&A bids where boards of directors of target companies have resisted bidders’ advances. Traditionally, the board-friendly Delaware approach,...more

Examples of Fee Shifting By-Laws

Some smaller companies and those in the process of going public have begun adopting fee shifting by-laws. As my colleagues at Stinson Leonard Street have advised, we urge caution for those headed in this direction until,...more

Brevan Howard v. Spanish Broad. Sys., Inc., C.A. No. 9209-VCG (Del. Ch. June 27, 2014) (Glasscock, V.C.)

In this memorandum opinion, the Delaware Court of Chancery denied defendant’s motion to dismiss, finding that plaintiffs had standing and sufficiently pled their breach of contract claim. Defendant, Spanish...more

Delaware Supreme Court: Directors May Resign by Oral Statement

Last month, in Biolase, Inc. v. Oracle Partners, L.P. (Del. June 12, 2014), the Delaware Supreme court affirmed the oral resignation of a director while on a board call....more

How Broad Was That Bylaw?

In yesterday’s posting, I noted a recent Form 8-K filing that discloses the adoption of a fee-shifting bylaw. In ATP Tour, Inc. v. Deutscher Tennis Bund, 2014 Del. LEXIS 209 (Del. May 8, 2014), the Delaware Supreme Court...more

In re Westech Capital Corp., Consol. C.A. No. 8845-VCN (Del. Ch. May 29, 2014) (Noble, V.C.)

In this post-trial Section 225 decision, the Court of Chancery resolved a dispute about the meaning of two subsections of a voting agreement that determine how its signatories would designate the directors of Westech Capital...more

Delaware Fee-Shifting Legislation Delayed

In the face of opposition from business organizations, the Delaware legislature has deferred consideration, likely until the beginning of 2015, of proposed legislation (discussed in the Corporate and Financial Weekly Digest...more

Public Company Adopts Fee Shifting Bylaw

The Delaware Supreme Court caused quite a stir when it concluded that a fee shifting bylaw adopted by a non-stock corporation did not run afoul of the Delaware General Corporation Law. ATP Tour, Inc. v. Deutscher Tennis...more

Federal Court Rules Boilermakers Didn’t Decide All Issues And Orders Company To File A Form 8-K

At first glance, the plaintiff’s position in Bushansky v. Armacost, 2014 U.S. Dist. LEXIS 88072 (N.D. Cal. June 25, 2014) seems a bit peculiar. The plaintiff had filed suit challenging Chevron Corporation’s adoption of an...more

Biolase v. Oracle Partners, L.P., C.A. No. 9438 (Del. June 12, 2014)

In this expedited appeal from a post-trial decision of the Court of Chancery, the Delaware Supreme Court affirmed the Court of Chancery’s holding that, under 8 Del. C. § 141(b), directors may resign by verbal statements,...more

Delaware Court of Chancery Applies Entire Fairness Standard to Going-Private Transaction with a Controlling Stockholder Negotiated...

In In re Orchard Enterprises, Inc. Stockholder Litigation, the Delaware Court of Chancery held that the entire fairness standard of review applied to a going-private transaction with a controlling stockholder, even though the...more

Why Biolase v. Oracle Partners, L.P. May Not Be The Last Word On Resignations

Yesterday, I mentioned the Delaware Supreme Court’s recent holding in Biolase, Inc. v. Oracle Partners, L.P., 2014 Del. LEXIS 278 (Del. June 12, 2014). In an opinion written by Chief Justice Leo E. Strine, Jr., the Supreme...more

Supreme Court of Delaware Finds Fee-Shifting Bylaws Permissible and the Potential Delaware Legislative Response

On May 8, 2014, the Supreme Court of Delaware held that fee-shifting provisions in a non-stock corporation’s bylaws can be valid and enforceable if not enacted for an improper purpose or improperly applied, under Delaware...more

What Good Can Come From Letting The Indifferent and Undecided Hold Sway?

I’ve written many posts on the subject of voting because it seems so straightforward and yet turns out to be complex. In tackling any voting problem, it is important to know and understand the applicable voting rule. An...more

Delaware Legislation Banning Fee-Shifting in Bylaws and Charters

In a swift response to the Delaware Supreme Court’s May 8 opinion holding that fee-shifting bylaws are facially valid (ATP Tour v. Deutscher Tennis Bund), members of the Delaware bar, representing both plaintiffs and...more

Recent Developments Relating to Hostile Deals in the US

In November 2013, Men’s Wearhouse made an unsolicited offer to acquire Jos. A. Bank, just weeks after rejecting a hostile offer from Jos. A. Bank. Jos. A. Bank initially rejected the “Pac Man” counteroffer, but ultimately...more

Using Corporate Bylaws and Charters to Set the Rules for Shareholder Litigation

Recent court decisions, including the Delaware Supreme Court’s opinion earlier this month in ATP Tour, Inc. v. Deutscher Tennis Bund, have focused new attention on the use of corporate bylaws and charters to establish the...more

Fee Shifting Bylaw Provisions May Face Constitutional Limitation

The corporate governance world has been disquieted by Delaware Supreme Court Justice Carolyn Berger’s recent opinion that upheld the validity of a fee-shifting bylaw provision in the bylaws of a Delaware non-stock...more

The Fluid State of Delaware Fee-Shifting Bylaws

On May 8, 2014, the Delaware Supreme Court held in ATP Tour, Inc. v. Deutscher Tennis Bund that a bylaw provision that shifts "all fees, costs and expenses of every kind and description (including, but not limited to...more

In an abrupt reversal, Delaware says "Ummm... Wait!" to fee shifting bylaws

It has been a dizzying couple of weeks for the Delaware Bar. Previously, the disaffected German tennis federation of the professional ATP tennis tour had sour grapes over the downgrading of the Hamburg tennis tournament and...more

Delaware Court Rules Nevada Law Governs But Applies Delaware Law

Although there are many significant differences between the corporate laws of Nevada and Delaware, the Nevada Supreme Court has often looked across the country to Delaware. Thus, the Nevada high court has adopted Delaware’s...more

Delaware Court Enforces “Loser Pays” Bylaw, Opens the Door for D&O Insurers to Better Assess and Control Shareholder Litigation...

The Delaware Supreme Court held that a corporation’s fee-shifting bylaw is enforceable as long as the bylaw is not adopted for an inequitable purpose. A first of its kind, this ruling seems poised to change dramatically the...more

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