News & Analysis as of

Business Judgment Rule Board of Directors Shareholder Litigation

Morris James LLP

Delaware Supreme Court Applies Business Judgment Rule, Dismisses Stockholder Claims Arising from TripAdvisor’s Nevada...

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On an interlocutory appeal from a decision denying a motion to dismiss, the Delaware Supreme Court reversed, holding that stockholder challenges to TripAdvisor’s decision to reincorporate in Nevada were governed by the...more

Winstead PC

Texas Codifies Business Judgment Rule and Reforms Derivative Actions: Key Changes Under SB 29

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Last month, Texas Governor Greg Abbott signed into law Senate Bill 29 (SB 29), introducing significant amendments to the Texas Business Organizations Code (TBOC).  Chief among these are the codification of the “business...more

Seyfarth Shaw LLP

Texas Adopts Business-Friendly Amendments to Its Corporate Code—A Response to Delaware?

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As states compete to become the preferred jurisdiction for incorporation, Texas has taken a bold step with significant amendments to its Texas Business Organizations Code. Following Delaware’s recent pro-management...more

Morris James LLP

Supreme Court Affirms Chancery Rulings in Derivative Litigation Challenging Oracle’s NetSuite Acquisition

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In re Oracle Corp. Deriv. Litig., C.A. No. 2017-0337 (Del. Jan. 21, 2025) - The Supreme Court affirmed the Court of Chancery’s decision in favor of the defendants in a derivative suit challenging Oracle’s acquisition of...more

Akin Gump Strauss Hauer & Feld LLP

Texas Enacts New Pro-Business Law to Expand Its Appeal as a Hub for Business Incorporations

On May 14, 2025, Gov. Greg Abbott (R-TX) signed Texas Senate Bill 29 (SB29) into law. This legislation introduces notable amendments to the Texas Business Organizations Code (TBOC) and is part of a broader strategy to...more

Bracewell LLP

Texas Adopts Significant Pro-Business Corporate Law Reforms

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With a pair of bills signed by Texas Governor Greg Abbott on May 14, 2025, and May 20, 2025, Texas took a major step in positioning itself as the pro-business jurisdiction of choice for public and private companies. The...more

Baker Botts L.L.P.

Texas Corporations Gain New Governance Tools and Increased Predictability in Shareholder Disputes

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Last week, Texas Governor Greg Abbott signed into law Texas Senate Bill 29, which includes a comprehensive package of amendments to the Texas Business Organizations Code aimed at reinforcing and revitalizing the governance...more

Vinson & Elkins LLP

Actions for Corporations to Obtain the Benefits of Amendments to the Texas Business Organizations Code

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On May 14, 2025, Texas Governor Abbott signed Senate Bill 29 (“S.B. 29”) into law, significantly reforming the Texas Business Organizations Code (“TBOC”) to promote Texas as a preferred state of incorporation for both public...more

Allen Matkins

Court: Nevada Allows Controllers To Vote In Their Own Interest

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Yesterday’s post concerned the recent decision by U.S. District Court Judge Charles R. Eskridge in Rowe v. Doris, 2025 WL 963590 (S.D. Tex. Mar. 31, 2025).  The case involved claims arising from the merger of two Nevada...more

Jones Day

Will the 'Business Judgment Rule' Be Bigger (and Better) in Texas?

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On February 27, 2025, Senator Bryan Hughes (R-Tyler) filed Senate Bill 29 (S.B. 29), proposing several corporate reforms designed to cement Texas as the premier business-friendly jurisdiction in the nation. If enacted, S.B....more

Holland & Knight LLP

Delaware Supreme Court: Permissive Business Judgment Rule Applies to Corporate Conversions

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everal 2024 decisions by the Delaware Court of Chancery led some prominent corporate leaders to express frustration over perceived increased liability standards for corporate officers and directors, even publicly advising new...more

Cooley LLP

Delaware Supreme Court Reverses Chancery Court, Holds Business Judgment Review Applicable to Tripadvisor’s Decision to...

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Delaware corporations contemplating conversion to another state should take note of the Delaware Supreme Court’s recent decision in Maffei, et al. v. Palkon, et al., in which the court ruled that Tripadvisor’s decision to...more

Perkins Coie

When Is a Minority Stockholder a Controller? The Delaware Supreme Court Reaffirms the Ground Rules in In Re Oracle Derivative...

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Controlling stockholders owe fiduciary duties to other stockholders that minority stockholders do not. A holder of over 50% of a corporation’s voting power is clearly a controlling stockholder. As a consequence, transactions...more

Allen Matkins

Is Pareto Optimality The Answer For Controlling Stockholder Transactions?

Allen Matkins on

Yesterday's post concerned the Delaware Supreme Court's decision that the business judgment rule applied to TripAdvisor's decision to reincorporate in Nevada.  Maffei v. Palkon, 2025 WL 384054 (Del. Feb. 4, 2025).  This...more

Jenner & Block

Delaware Supreme Court Clarifies MFW Framework

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On April 4, 2024, the Delaware Supreme Court held in In re Match Group Inc., Derivative Litigation that the entire fairness standard of review applies to all controlling stockholder transactions in which a controller receives...more

Nutter McClennen & Fish LLP

M&A in Brief: Q1 2024

In a letter ruling, the Delaware Chancery Court held that where neither the target nor the acquiror was a Delaware entity, the transaction documents between the parties could not confer jurisdiction in the Chancery Court...more

Holland & Knight LLP

Conflictos de interés en Colombia, nueva regulación

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En este episodio de "A Lo Legal En Par Minutos", nuestro abogado Edwin Cortés habla con Daniel Fajardo, abogado corporativo, sobre la novedosa regulación en conflictos de interés, en particular la ampliación de la definición...more

Venable LLP

Fiduciary Liability Limitations Under Nevada Law Trigger Entire Fairness Review of Conversion from Delaware Due to Controlling...

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The Delaware Court of Chancery, in Palkon v. Maffei, et al., C.A. No. 2023-0449-JTL (Del. Ch. Feb. 20, 2024), determined that a reduction in the liability exposure of a fiduciary due to the conversion of a Delaware...more

Goodwin

Delaware Court of Chancery Rescinds Elon Musk’s $55.8 Billion Compensation Package in Cautionary Tale About Director Independence...

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On January 30, 2024, the Chancellor of the Delaware Court of Chancery struck down the $55.8 billion compensation plan that Tesla, Inc.’s board of directors had granted to Tesla’s well-known CEO, Elon Musk, finding that the...more

Venable LLP

Supreme Court of Maryland Overrules Prior Distinction Between Director’s Managerial and Non-Managerial Duties and Reaffirms That...

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In one of the most significant Maryland corporate law cases in several years, involving an inter-generational family contest between (a) a 28% stockholder and former director and employee (“Mekhaya”) and (b) the corporation...more

Hinshaw & Culbertson LLP

The Business Judgment Rule Saves Disney Officers and Directors in a Stockholder Records Action

Corporate activity related to ESG can have profound legal and market consequences. These consequences can be cut many ways. Although having taken a position on Florida legislation that resulted in negative business...more

Goodwin

McDonald’s Part Two: Delaware Court of Chancery Dismisses Caremark Claims Against Directors Arising From Sexual Harassment Issues

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On March 1, 2023, in In re McDonald’s Corporation Stockholder Derivative Litigation, Vice Chancellor Travis Laster of Delaware’s Court of Chancery granted a motion to dismiss derivative claims against McDonald’s directors...more

DarrowEverett LLP

Life May Not Be Fair, But Interested Party Transactions Should Be

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When a court reviews contested business transactions of a Delaware corporation, they typically rely on one of two standards of review: the “business judgment rule” or the “entire fairness standard.” The business judgment rule...more

Hogan Lovells

In re Tesla: fair price may ameliorate procedural defects under entire fairness review - Corporate / M&A Decisions update series

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Tesla Motors Stockholder Litigation arises out of Tesla’s acquisition of SolarCity, a market leader in manufacturing and installing solar energy generation systems. On two occasions in 2015 and 2016, Elon Musk suggested to...more

BCLP

Delaware Chancery Court Decision Highlights Risks of Liability for Directors in SPAC Deals

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A recent Delaware Chancery Court decision highlights the liability risks faced by directors and sponsors of special purpose acquisition companies (“SPACs”) and the importance of robust disclosure in protecting against those...more

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