“Was the richest person in the world overpaid?” That’s how the Delaware Court of Chancery (the Court) began the 200-page opinion in Tornetta v. Musk to rescind Elon Musk’s entire $55.8 billion 10-year equity compensation...more
Public company directors are under more pressure than ever to oversee enterprise risk, even risk from day-to-day operations, which is normally addressed by management. Egregious failures of upper management to react to red...more
Takeaways - Independence is neither a fixed condition nor a universal status for all purposes. Events and relationships can disqualify an otherwise independent director from participating in decisions.. No matter how pure a...more
Why is director independence important? A court’s conclusion of whether the majority of a company’s board is independent could affect...more
In re GGP Inc. Stockholder Litig., C.A. No. 2018-0267-JRS (Del. Ch. May 25, 2021). Under MFW and its progeny, if there is a conflicted controlling stockholder, then in order to receive the benefits of the business...more
This issue covers important, developing areas of Delaware corporation law and deal litigation, including an increased focus on officer-related actions in merger litigation, the treatment of Caremark claims after Marchand and...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
Consistent with trends in recent years, in 2019 Delaware corporation law largely was shaped by post-closing suits for money damages against directors who had approved mergers and acquisitions. Two Delaware Supreme Court...more
On June 18, 2019, in a decision authored by Chief Justice Leo E. Strine Jr., the Delaware Supreme Court en banc reversed the dismissal of a stockholder derivative suit against the directors and officers of Blue Bell...more
On June 18, 2019, in Marchand v. Barnhill, the Delaware Supreme Court, in an opinion written by Chief Justice Leo E. Strine, Jr. on behalf of a unanimous court, issued a decision reversing the Court of Chancery’s dismissal of...more
DIRECTORS AS VENDORS - A new controversy at a large health system highlights the legal and reputational challenges that can arise when directors sell services to the organizations they serve as fiduciaries. According to...more
This is an important decision if only because it explains a further limitation on the Corwin rule that an informed uncoerced stockholder vote insulates a corporate transaction from attack. First, the decision explains when a...more
What is the most significant recent development in Delaware, from a litigation standpoint? The most significant recent development impacting deal litigation in Delaware is the continuing evolution of the Corwin doctrine,...more
The Delaware Supreme Court recently issued an important decision on the subject of director independence. In Sandys v. Pincus, No. 157, 2016 (Del. Dec. 5, 2016), the Delaware Supreme Court held that certain directors of...more
Regulatory Developments - DOL Issues Final Fiduciary Rule - On April 6, the Department of Labor (DOL) unveiled its pre-publication final version of the long-awaited fiduciary rule (the Final Rule). Some of the more...more
Fee Shifting and Forum Selection Clauses - Much attention has been paid to Delaware legislative developments regarding fee shifting and forum selection clauses. On June 24, 2015, Delaware Governor Jack Markell signed...more
In its August 27th post-trial opinion, In re Dole Food Co., Inc. Stockholder Litigation, the Delaware Chancery Court held Dole executives David Murdock and Michael Carter personally liable for $148 million in damages for...more
Delaware’s requirements for stockholders to maintain derivative actions reflect the twin principles of director management and control and accountability. Because directors manage the business and affairs of Delaware...more
The Delaware Supreme Court recently issued an important decision clarifying the standards that govern claims for money damages against independent directors of corporations whose charters contain exculpatory provisions. ...more
A recent decision by the Delaware Supreme Court provides independent directors, such as special committee members, with the ability to escape protracted fiduciary duty litigation during its initial stages. The court’s...more