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In Seavitt v. N-able, Inc., the Delaware Court of Chancery held that certain governance rights granted to a corporation’s significant stockholders were statutorily invalid. This included a provision purporting to allow those...more
In August 2022, the Delaware General Assembly amended the Delaware General Corporation Law (“DGCL”) to allow corporations to adopt charter provisions exculpating certain officers from personal liability for monetary damages...more
On February 23, 2024, the Delaware Court of Chancery issued a decision in a class action lawsuit (West Palm Beach Firefighters’ Pension v. Moelis & Co.) that concluded most of the control provisions in a stockholder agreement...more
Recently, in Colon v. Bumble, the Delaware Court of Chancery held that certain provisions in the charter of Bumble, Inc. (Bumble), which contemplated that each share of stock carried either one vote or 10 votes depending upon...more
We’ve all read countless headlines and articles about the removal and swift return of Sam Altman as CEO of OpenAI over the past several weeks. Simply put, the nonprofit board voted to remove Altman as a result of a...more
As Vice Chancellor, Leo E. Strine Jr. once declared "Delaware law does not charter law breakers". In re Massey Energy Co., No. CIV. A. 5430-VCS, 2011 WL 2176479, at *20 (Del. Ch. May 31, 2011). The California General...more
What happened - A recent Delaware chancery court decision has called into question consolidated voting on charter amendments by some companies with multiple classes of common stock. In Garfield v. Boxed, Inc., the court...more
If the rule isn’t that anything goes with enough votes, what is it? Experienced entrepreneurs and investors alike understand that equity dilution is a fundamental aspect of investing in corporations. This is especially...more
Our Securities and Securities Litigation Groups suggest that Delaware companies consider updates to corporate charters following a change in Delaware law allowing companies to exculpate officers....more
On July 29, the Delaware Court of Chancery issued a noteworthy decision confirming the broad application of the "MFW" framework—based on the Delaware Supreme Court's decision in Kahn v. M & F Worldwide Corp., 88 A.3d 635...more
In 2018, the Delaware courts issued a broad range of important decisions addressing various corporate law and governance issues. Those decisions are relevant for public and private companies and will help shape...more
The Delaware Court of Chancery ruled today that Delaware corporations do not have the power to use charter or bylaw provisions to require that claims under the Securities Act of 1933 (1933 Act) be litigated in federal court....more
In a highly anticipated decision, the U.S. Court of Appeals for the Fifth Circuit recently affirmed a bankruptcy court order dismissing a chapter 11 case filed by a corporation without obtaining—as required by its corporate...more
On August 1, several amendments to the Delaware General Corporation Law, 8 Del. C. § 1-101 et seq. (the DGCL), became effective. The most notable amendments alter (1) the availability of statutory appraisal rights and (2) the...more
On April 19, 2018, the Executive Committee of the Delaware State Bar Association approved proposed amendments to the Delaware General Corporation Law (DGCL). This year’s amendments would provide for the application of the...more
Delaware Senate Bill 75 (“SB 75”) was approved by the House of Representatives on June 11, 2015 and signed into law by Delaware Governor Jack Markell on June 25. The new law enacts two very significant changes to the Delaware...more
I’ve noticed that the drafters of corporate laws seemed to have overlooked the mortality of directors. Section 141(b) of the Delaware General Corporation Law, for example, prescribes the term of directors as follows...more
Advancement and indemnification rights provide directors and officers of Delaware corporations comfort when accepting positions that often lead to being named in litigation. However, once the interests of the executive and...more
There has been considerable interest over the last year about whether a fee-shifting provision in the charter or bylaws of a Delaware corporation is enforceable. On Thursday, June 11, 2015, the Delaware House of...more
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
The Corporation Law Section of the Delaware State Bar Association has approved, in substantially the form proposed by the Delaware Corporate Council, amendments to the General Corporation Law of the State of Delaware (DGCL)...more
The Council of the Corporation Law Section of the Delaware State Bar Association recently released proposed amendments to the Delaware General Corporation Law (DGCL) that would prohibit fee-shifting provisions in a...more
The Delaware State Bar Association is submitting new legislation that will prohibit the use of fee-shifting bylaws or corporate charters for litigation involving “intracorporate” disputes. ...more
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