In this issue, we discuss recent Delaware court decisions further developing the bounds around books and records demands. Other articles focus on recent developments concerning advance notice bylaws and the standards used by the Delaware courts to assess their enforceability, as well as the expansion of MFW’s application to include a variety of transaction structures in which a controller receives a non-ratable benefit. Finally, we look at the need for boards to implement and monitor effective oversight systems for “mission critical” risks, despite recent cases that dismiss such Caremark claims.

Current Bounds on Books and Records Demands 
Books and records demands are not an “open sesame.” Recent Delaware court decisions continue to shape the bounds of books and records demands.

Advancing Forward — Delaware Courts Provide Further Guidance on Incumbent Board Enforcement of Advance Notice Bylaws
A recent Delaware decision reiterates that unambiguous advance notice bylaws will be enforced and clarifies that enhanced scrutiny focusing on the reasonableness of a board’s action will be the standard of review applied to incumbent directors’ rejection of a dissident stockholder’s nominees.

Delaware Court of Chancery Applies MFW Factors to ‘Reverse Spinoff’
Controllers and directors of controlled companies should consider the use of MFW in varying contexts, as Delaware court decisions continue expanding its application to include a variety of transaction structures in which a controller receives a non-ratable benefit.

Court of Chancery Dismisses Caremark Claims Because of Reporting Systems
Despite the Court of Chancery’s recent dismissals of Caremark claims in two cases, the court’s analysis underscores the need for boards to implement and monitor effective systems for “mission critical” risks.

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