In Kellner v. AIM ImmunoTech Inc., the Delaware Supreme Court affirmed in part and reversed in part the Delaware Court of Chancery’s closely watched ruling, which invalidated several provisions in the bylaws of AIM ImmunoTech...more
The amendments to the Delaware General Corporation Law (DGCL) are effective yesterday, August 1, and will apply retroactively to agreements and contracts that a Delaware corporation entered into, or that a Delaware...more
In West Palm Beach Firefighters’ Pension Fund v. Moelis & Company, the Delaware Court of Chancery invalidated a set of approval rights contained in a stockholder agreement as facially in conflict with Section 141(a) of the...more
In a landmark decision, the Delaware Court of Chancery addressed, for the first time, the precise duties that a controlling stockholder owes, and the standard of review that will apply, when a controlling stockholder takes...more
1/26/2024
/ Board of Directors ,
Breach of Duty ,
Business Disputes ,
Business Litigation ,
Business Plans ,
Controlling Stockholders ,
Fiduciary Duty ,
Interference Claims ,
Liquidation ,
Private Equity Funds ,
Publicly-Traded Companies ,
Shareholder Rights ,
Voting Rights
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
A board of directors of a Delaware company may delegate its authority to grant equity awards if certain requirements enumerated in the Delaware General Corporation Law (DGCL) are met. Effective August 1, 2023, updates were...more
It is well established that corporate officers owe the same fiduciary duties as directors under Delaware law. However, the Delaware courts have not had occasion to consider every species of fiduciary duty claim against...more
Effective as of August 1, amendments to the Delaware General Corporation Law (DGCL) update the framework under which a company’s board of directors may delegate its authority to grant equity incentive awards....more
In Totta v. CCSB Financial, the Court of Chancery invalidated a boards’ invocation of an anti-takeover provision in the corporation’s certificate of incorporation. It did so because the board invoked the provision to thwart...more
Whether a stockholder of a corporation or member of a limited liability company (LLC) is a controlling stockholder or member often has a significant impact on breach of fiduciary duty actions, including those arising out of...more
Who Needs to Know -
Boards of directors of Delaware corporations contemplating the adoption of a stockholder rights plan (a/k/a poison pill)....more
In In re Mindbody, Inc. Stockholders Litigation, the Delaware Court of Chancery declined to dismiss breach of fiduciary duty claims against the chief executive officer of MINDBODY, Inc. (the Company) arising out of the...more
10/6/2020
/ 10b5-1 Plans ,
Acquisitions ,
Board of Directors ,
Breach of Duty ,
Business Judgment Rule ,
CEOs ,
Corwin Doctrine ,
Fiduciary Duty ,
Merger Agreements ,
Mergers ,
Private Equity Firms
In Teamsters Local 443 Health Services & Insurance Plan v. Chou, the Delaware Court of Chancery held, at the pleading stage, that plaintiff stockholders had stated a claim for Caremark oversight liability against certain of...more
8/27/2020
/ Board of Directors ,
Caremark claim ,
Criminal Investigations ,
Delaware General Corporation Law ,
Department of Justice (DOJ) ,
Fiduciary Duty ,
Food and Drug Administration (FDA) ,
Form 10-K ,
Oversight Duties ,
Personal Liability ,
Reasonable Doubt ,
Scienter ,
Shareholders ,
Subsidiaries
Overview Governor Carney recently signed into law certain amendments (the Amendments) to the Delaware General Corporation Law (the DGCL) that (i) clarify the powers of boards of directors in an emergency...more
A recent decision by the Delaware Supreme Court emphasizes the importance of fully disclosing material director and officer conflicts of interest in connection with proposed M&A transactions. Indeed, as the Court’s ruling...more
7/9/2020
/ Acquisitions ,
Board of Directors ,
Breach of Duty ,
Business Judgment Rule ,
Conflicts of Interest ,
DE Supreme Court ,
Disclosure Requirements ,
Fairness Standard ,
Fiduciary Duty ,
Fraud ,
Mergers ,
Shareholder Litigation ,
Standard of Review
On June 11, the Delaware Court of Chancery issued important guidance to boards of directors of Delaware corporations and their controlling stockholders seeking to utilize the dual protections of MFW2 — a special committee and...more
In a prior client alert, we discussed a decision by the Delaware Supreme Court, Appel v. Berkman, in which the court held that the board’s failure to disclose the reasons why the chairman of the board abstained from voting on...more
On February 27, the Delaware Court of Chancery issued important guidance to boards of directors seeking to utilize special committees of disinterested and independent directors to insulate themselves from fiduciary liability...more
3/10/2020
/ Acquisition Agreements ,
Arms Length Transactions ,
Board of Directors ,
Business Judgment Rule ,
Controlling Stockholders ,
Entire Fairness Standard ,
Fiduciary Duty ,
Independent Director ,
Negotiations ,
Shareholder Votes ,
Special Committees ,
Standard of Review
A director’s duty to make a good faith effort to oversee the operations and management of a Delaware company is well-established. In a recent case, Marchand v. Barnhill, the Delaware Supreme Court provided guidance to boards...more
7/18/2019
/ Blue Bell Creameries ,
Board of Directors ,
Breach of Duty ,
Business Operations ,
Caremark claim ,
Controlling Stockholders ,
DE Supreme Court ,
Derivative Suit ,
Dismissals ,
Fiduciary Duty ,
Food and Drug Administration (FDA) ,
Food Contamination ,
Food Manufacturers ,
Food Recalls ,
Good Faith ,
Liability ,
Listeria ,
Manufacturing Facilities ,
Oversight Duties ,
Reversal ,
Risk Management
On April 17, the Corporation Law Section of the Delaware State Bar Association proposed amending the Delaware General Corporation Law, 8 Del. C. §§ 1-101, et seq. (the DGCL). If the proposed legislation is enacted, the...more
On March 20, 2013, legislation proposing to amend the Delaware General Corporation Law, 8 Del. C. §§ 1-101, et. seq. (DGCL) was submitted to the Corporation Law Section of the Delaware State Bar Association. If the proposed...more
On December 17, 2012, in In re Ancestry.com Inc. S’holder Litig., C.A. No. 7988-VS (Del. Ch. Dec. 17, 2012), the Delaware Court of Chancery issued a bench ruling addressing a recent decision enjoining enforcement of a “Don’t...more