News & Analysis as of

Special Compensation Arrangements with Dissident Director Nominees

Certain activist shareholders involved in proxy contests have offered special compensation (e.g., a fee for agreeing to be nominated on the activist’s slate or performance-related bonuses after election) to their director...more

Introduction To The SDX Protocol

The Shareholder-Director Exchange (SDX™) is a working group of leading independent directors and representatives from some of the largest and most influential long-term institutional investors. SDX participants came together...more

MA Appeals Court Narrows but Otherwise Keeps Intact Individual Liability Under the Wage Act

A recent decision from a Massachusetts appeals court should give some Massachusetts certain managers and directors one less thing to worry about. Simply having the title of a manager or director alone is insufficient for...more

King v. DAG SPE Managing Member, Inc., C.A. No. 7770-VCP (Del. Ch. Dec. 23, 2013) (Parsons, V.C.)

In this memorandum opinion, the Court of Chancery dismissed an action under Section 220 of the Delaware General Corporation Law brought by a former director to inspect a corporation’s books and records. The Court found that...more

North Carolina Supreme Court Addresses Duties of Corporate Directors

On November 8, 2013, the North Carolina Supreme Court issued a rare opinion addressing the duties of corporate directors and reaffirming that those duties are generally owed only to the corporation itself rather than the...more

Top 10 Topics for Directors in 2014

Top 10 Topics for Directors in 2014 - U.S. public companies face a host of challenges as they enter 2014. Here is our list of hot topics for the boardroom in the coming year: 1. Oversee strategic planning amid...more

Canmore Consultants Ltd. v. L.O.M. Medical Int'l, Inc.: A Limited Exception To Directorial Authority To Fill Board Vacancies

Canmore Consultants Ltd. v. L.O.M. Medical International, Inc. 8 Del. C. § 223(c): A Limited Exception To Directorial Authority To Fill Board Vacancies - Section 223(c) of the Delaware General Corporation Law (the...more

An Unexpected Impasse

If a corporation has four directors and two shareholders, one owning 60 shares and the other owning 40 shares, it seems obvious that the majority shareholder should be able to elect a majority of the board of directors. ...more

The Challenge for Boards

Public company boards have experienced real turbulence for the better part of five years. Some of this turbulence is the product of internal dynamics — the need to improve liquidity, strengthen balance sheets and cut costs....more

Seventh Circuit Increasingly Problematic for Directors and Officers Defending Shareholder Derivative Suits

With its recent decision in Westmoreland County Employee Retirement System v. Parkinson, et al., the United States Court of Appeals for the Seventh Circuit has confirmed that the courts of the Seventh Circuit can be a...more

SEPTA v. Volgenau, C.A. No. 6354-VCN (Del. Ch. Aug. 5, 2013) (Noble, V.C.)

In this opinion, the Court of Chancery granted defendants' motion for summary judgment as to all counts of a stockholder class action complaint, which alleged breaches of fiduciary duty by corporate directors and a...more

Private Prosecutions - An Often Overlooked Method of Corporate Enforcement in England and Wales

In Ireland, a hotelier has initiated a private prosecution against a current and a former employee of an Irish bank. The hotelier was a director and shareholder of two companies which apparently owed a significant amount to...more

Must Designated Directors Keep A Secret?

Yesterday’s post concerned the attorney-client privileged issues in Vice Chancellor J. Travis Laster’s recent decision in Kalisman v. Friedman, 2013 Del. Ch. LEXIS 100 (April 17, 2013). I found another statement in the...more

What Makes A Director “Independent”?

What makes a director “independent”? That question is important, not only to investors who want to ensure that boards of directors exercise objective judgment on corporate affairs, but also to companies, who need assurance...more

Liability of Directors in Canada – An Excerpt

This article is an excerpt of the Canada Chapter of International Liability of Corporate Directors, 2nd edition, published by Juris Publishing in February 2013. This excerpt excludes numerous aspects of the full chapter,...more

Benefit Corporations – A New Type Of Corporation – Are Now Authorized In Pennsylvania

On January 23, 2013, the Pennsylvania Benefit Corporation Act (the Act) became effective. The Act authorizes a new type of for-profit business corporation known as a benefit corporation. Pennsylvania is now one of 12 states...more

Jepsco, Ltd. v. B.F. Rich Co., Inc., C.A. No. 7343-VCP (Del. Ch. Feb. 14, 2013) (Parsons, V.C.)

The Delaware Court of Chancery held that claims for breach of statutory and fiduciary duties against a custodian appointed under Section 226 of the Delaware General Corporation Law (“DGCL”) failed as a matter of law because...more

"Don't Ask, Don't Waive" Standstill Provisions: Impermissible Limitation on Director Fiduciary Obligations or Legitimate,...

Under Revlon and its progeny, directors of Delaware corporations have a duty to take reasonable steps to ensure that stockholders receive the highest price reasonably available in a sale of the company. One way that target...more

Communicate CEO Turnover

More than any other company move, CEO successions form headlines, providing an important indication of an organization’s viability. Executive leadership changes have a profound effect not only on public perception, but on the...more

2013 U.S. Proxy Voting Policies and Procedures FAQ (Excluding Compensation-Related Questions)

The following issues are among those addressed in ISS' non-compensation-related FAQs... ...more

Other NYSE/NASDAQ Developments

Non-Executive Employment of Family Members No Longer Precludes Nomination of Non-Independent Directors under “Exceptional and Limited Circumstances” Until recently, a director of a NASDAQ-listed company could serve as an...more

Inside The Courts - December 2012

This issue of Inside the Courts, Skadden's securities litigation newsletter, includes summaries and associated court opinions of selected noteworthy cases principally decided from July to November 2012. This edition addresses...more

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