Morris James attorneys Lewis Lazarus, Albert Manwaring and Albert Carroll authored an article published in Transaction Advisors titled Delaware Corporate and Commercial Case Law Year in Review – 2016. The article summarizes...more
In a stockholder challenge to a going-private merger by a controlling stockholder to buy out minority stockholders, the operative standard of review is ordinarily the most rigorous judicial review, entire fairness. To obtain...more
In an appraisal proceeding under Section 262 of the Delaware General Corporation Law, the Delaware Court of Chancery determines the "fair value" of a company's "shares exclusive of any element arising from the accomplishment...more
The Delaware Supreme Court held in Corwin v. KKR Financial Holdings, that "when a transaction not subject to the entire fairness standard is approved by a fully-informed, uncoerced vote of the disinterested stockholders, the...more
In a stockholder challenge to a sale of the company, a plaintiff may rebut the business judgment rule by pleading facts that support a reasonable inference that at least half of the directors, who approved the sale, were not...more
Many Delaware companies have adopted forum selection bylaws that prevent their stockholders from bringing internal corporate claims in courts outside of Delaware. These bylaws are a valid and effective tool for limiting...more
To determine the applicable standard of review in a stockholder challenge to a corporate transaction, a plaintiff may rebut the business judgment rule by pleading facts that support a reasonable inference that "a controlling...more
Section 220(d) of the Delaware General Corporation Law (DGCL) permits a director to inspect a company's books and records "for a purpose reasonably related to the director's position as a director." It is well settled under...more
M&A lawsuits and so-called “disclosure-only” settlements – where stockholder plaintiffs drop their requests to enjoin a deal and grant defendants broad releases primarily in exchange for supplemental disclosures to...more
In the absence of a prior-filed action in another forum, Delaware state courts will respect a plaintiff's Delaware choice of forum when faced with a forum non conveniens defense, except in the "rare case" where a defendant...more
Section 141(k) of the Delaware General Corporation Law (DGCL) contains the default rule that a corporation’s stockholders have the right to vote to remove directors from the board “with or without cause.” Section 141(k)...more
Investment bankers seeking to profit as both adviser to the seller and financier to the buyer in corporate sales processes have faced increased scrutiny by Delaware courts over the last few years. In a highly-publicized 2011...more
Section 102(b)(7) of the Delaware General Corporation Law permits a provision in a company's certificate of incorporation that exculpates directors from monetary liability for breaches of the fiduciary duty of care. By...more
In a self-interested transaction between a company and its controlling stockholder, the operative standard of judicial review under Delaware law is the most rigorous: entire fairness standard of review. To obtain the least...more
10/8/2015
/ Business Court Division ,
Controlling Stockholders ,
Duty of Loyalty ,
Fairness Standard ,
Fiduciary Duty ,
Food Manufacturers ,
Fraud ,
Going-Private Transactions ,
Initial Public Offering (IPO) ,
Mergers ,
Self-Dealing ,
Shareholder Approval ,
Shareholder Litigation ,
Spinoffs
Advance notice bylaws, requiring stockholders to give a corporation timely notice of their nominees to the board before a stockholder meeting for the election of directors, are a proper corporate governance tool. The purpose...more
Delaware courts often emphasize the freedom of contract of parties to define their rights, powers, duties, obligations, liabilities and restrictions in a limited liability or operating agreement under the Delaware Limited...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
On Feb. 11, The Wall Street Journal reported that General Motors (GM) was evaluating a potential nominee to its board from four hedge funds, collectively holding more than 34 million of GM's shares....more
4/2/2015
Before the newly enacted statutory amendment, 10 Delaware Code Section 8106(c), parties could shorten, but were not permitted to lengthen, an applicable limitations period by contract because an extension of the statute of...more
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