Sky Blog
Delaware courts have recently had opportunities to address the dual conditions for management of controlling stockholder conflict transactions under Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014) (“MFW”) and its progeny. That MFW structure provides …
Material adverse change/effect (“MAC”) clauses have evolved into important risk-allocation mechanisms that are commonly included in high-profile mergers and acquisitions (“M&A”) and financing deals. They typically allow lenders or buyers to either terminate an agreement without cost or penalty or …
Delaware courts have recently had the opportunity to evaluate and discuss management of potential conflicts. That guidance may be particularly salient in the context of insider transactions and down-rounds, which may animate potential conflicts and lead to difficult litigation for …
Recent Delaware case law offers useful guidance regarding options for management of potential conflicts. Those cases demonstrate that conflicts can be mitigated by board or stockholder actions and that such measures for managing conflicts should be thoughtfully tailored to the …
What should a judge do when creditors claim that they were harmed by management and a board’s carelessness or disloyalty? If the creditors were shareholders, the judge would apply fiduciary duty doctrines to determine liability. Yet it’s unclear what legal …
Climate change, economic insecurity and inequality, and worries that some companies and industries have grown too large, concentrated, and powerful have heightened concern about whether business entities conduct themselves in society’s best interests. The profound human and economic harm of …
On July 16, 2020, Delaware’s Governor signed House Bill 341 (the “Amendments”),[1] amending key provisions of Delaware’s General Corporation Law (“DGCL”). Among other things, the Amendments modify existing statutory provisions governing boards of directors’ power to adopt emergency bylaws, …
In 1985, the Delaware Supreme Court, in Unocal Corp. v. Mesa Petroleum Co.,[1] held that the “omnipresent specter” of a conflict of interest sufficiently clouds judicial review of anti-takeover measures to require application of enhanced scrutiny. Notably, the …
The Delaware Supreme Court’s recent decision in Fir Tree v. Jarden[1] marks an important milestone in the law of appraisal, making clear that unaffected market price can and should be decisive in some appraisal actions. Because the court’s opinion …
In corporate democracy, the default system for electing directors is voting, but shareholders are free to commit their votes by contract. In private companies, shareholders routinely do so, using shareholder agreements – contracts among the owners of a firm – …
One of the most important developments in Delaware corporate law recently has been the expansion of shareholder rights to company information. Shareholders can now use their general right to inspect a company’s “books and records” (Section 220 of the Delaware …
Hardly a day goes by without a headline about the brewing tension between the United States and China. But even as the Trump administration mulled de-listing Chinese firms traded in American securities markets, and Nasdaq reportedly planned to tighten its …
Delaware’s success in attracting corporate formations is well known, but explanations for it vary. In a recent paper, I test these explanations as well as the reasons for Delaware’s success in attracting other types of business formation I find evidence …
One of the most significant corporate governance implications of the pandemic may be its impact on the role and function of a board’s enterprise risk committee. From one perspective, the pandemic may increase that committee’s significance, potentially putting it on …
Almost everyone has experienced buyer’s remorse. It’s the feeling of purchasing, say, a big-screen TV at full price, only to see it on sale later for 50 percent off. Imagine, though, agreeing to pay $6 million for a chain of …
When the markets go haywire, as they appear to be doing now, stock prices cease to provide useful signals about corporate value or the performance of the men and women in the C-suite. This is a major problem for the …
Conflicts among shareholders are pervasive, whether rooted in personal animosity or differences of opinion on business matters. They arise in private and public corporations operating in all sectors of the economy. And in some cases, the conflicts are so large …
Delaware is widely known for providing the U.S. corporate law that governs most large, publicly traded companies. However, the economic imperatives prompting this have also led Delaware to explore opportunities in related though distinct fields, effectively leveraging its corporate law …
The number of securities cases filed in federal court continued at a furious pace for the third year in a row. This year-end update highlights what you most need to know in securities litigation trends and developments for the last …
Tesla notched a trifecta of (legal) headlines this week, with three inter-related developments coming out of the shareholder challenge to the firm’s 2016 purchase of SolarCity: a settlement, a summary judgment decision, and an almost-certain trial featuring testimony by none …