DGCL

How Not to De‑Classify a Board

By Andrew Verstein April 22, 2025 by renholding

Activist investors often think that the classification of boards abets sloth, protecting directors from shareholder input. Yet boards understandably value the durability and continuity of multi-year terms, which give them the bargaining power to pursue long-term plans. Companies often try …

Did SB21’s Changes to Delaware Corporate Law Harm Shareholders?

By Tiago Duarte-Silva and Aaron Dolgoff April 16, 2025 by renholding

On March 26, 2025, Delaware Governor Meyer signed into law Senate Bill 21 (“SB21”) updating Delaware’s corporate law. While there has been considerable discussion of whether the bill was beneficial or detrimental to shareholders, we show that there is no …

The “Section 122 Revolution” and What to Do About It

By Zachary Gubler March 24, 2025 by renholding

Under Section 141 of the Delaware General Corporation Law, a corporate board could theoretically create a committee consisting of a single director, call her Daphne, to whom it gives a veto right over all decisions taken by the full board. …

A Proposed Opt-In Feature for Delaware Senate Bill 21

By Eric Talley, Jeffrey N. Gordon and Stephen M. Bainbridge March 19, 2025 by renholding

On March 18, a group of 26 corporate law and governance professors (including the three of us) co-signed a letter that was sent to the Delaware General Assembly and called for a pragmatic resolution to the debate over Senate Bill

…

A New Census of Corporations

By Andrew Verstein March 10, 2025 by renholding

Where do entities incorporate? The question is of perennial interest to academics who wish to research and teach the laws that govern many companies. It is of particular interest now, given a string of controversial court decisions and legislative responses…

A Contractarian Path Forward for Delaware: A Modest Proposal for SB21

By Eric Talley March 7, 2025 by renholding

As I write this from the Tulane Corporate Law Institute’s annual conference in New Orleans, the energy is palpable. While Mardi Gras revelers have vacated the streets, they’ve been replaced by a different phalanx of uncharacteristically confrontational carousers: corporate law …

The Legitimation of Shareholder Primacy

By Ann M. Lipton February 27, 2025 by renholding

We are living in a particularly polarized era, and corporate governance is no exception.  The divisions have threatened to spill over to Delaware, the preferred jurisdiction for incorporation in the United States, with several high-profile cases calling the state’s neutrality …

The Good, the Bad, and the Lost Opportunities of Delaware’s Proposal on Deal Conflicts Involving Directors and Officers

By Stephen M. Bainbridge February 25, 2025 by renholding

The recently introduced Delaware Senate bill that would amend the Delaware General Corporation Law (DGCL) provision dealing with conflict of interest transactions (SB 21) has blown up the financial news, corporate law blogosphere, and corporate law social media.[1]

Most …

Delaware Law’s Biggest Overhaul in Half a Century: A Bold Reform – or the Beginning of an Unraveling?

By Eric Talley, Sarath Sanga and Gabriel V. Rauterberg February 18, 2025 by renholding

Yesterday, Delaware State Senator Bryan Townsend introduced a sweeping set of amendments to the Delaware General Corporation Law. If adopted, these measures would mark the most significant single-year revision of Delaware’s corporate code since at least 1967, reshaping everything from …

The Political Significance of Former Delaware Chancellor Chandler’s Criticism of Chancellor McCormick and Vice Chancellor Laster

By Joel Edan Friedlander January 16, 2025 by renholding

On the evening of June 20, 2024, William B. Chandler, III, a former chancellor of the Delaware Court of Chancery and now a practicing Delaware lawyer, gave testimony in the state’s House of Representatives that culminated the legislative response to …

A Course Correction for Conflicted Controller Transactions

By Stephen M. Bainbridge November 26, 2024 by renholding

Controlling shareholders function as a dual-edged sword in corporate governance. They can reduce agency costs by monitoring management but also pose risks of self-dealing that can harm minority shareholders. In recent years, Delaware courts have increasingly focused on the latter …

The Drama Around Moelis and New DGCL Section 122(18) Just Got Hotter

By Mark Lebovitch November 18, 2024 by renholding

The 2024 amendments to the Delaware General Corporation Law (“DGCL”) were born from an atypical period of acrimony and controversy among the corporate bar, stockholder advocates, and corporate law academics, including harsh public criticism of members of the Court of …

Why Lost-Premium Damages in M&A Should Be Legal

By Jonathan Chan and Martin Petrin October 24, 2024 by renholding

Are “lost-premium” provisions – clauses that typically allow a target to recoup the premium its shareholders were denied because a buyer wrongfully backed out of a deal – enforceable? In a surprising decision last year, the Delaware Court of Chancery …

Delaware Chancery Weighs In on Maximizing Shareholder Value

By J S Liptrap October 3, 2024 by renholding

The relationship between directors’ fiduciary duties and shareholder wealth maximization under Delaware law has long been a prickly topic. Some commentators argue the relationship is merely a default capable of adjustment through private ordering.[1] Others, pointing to cases like …

How the U.S. Oversight Doctrine Gained a Toehold in Europe

By Timo Kaisanlahti September 5, 2024 by renholding

In the realm of corporate law, board directors are bound by fiduciary duties of loyalty and care to both the company and its stockholders.[1] The interpretation of these duties, however, is national, even in the European Union, despite its …

Nevadaware Divergence: How Nevada and Delaware Really Differ in Corporate Law

By Wendy Gerwick Couture August 29, 2024 by renholding

The differences between Nevada and Delaware corporate law – which I call “Nevadaware divergence” – are the subject of media attention, scholarly critique, and current litigation. The common wisdom is that Nevada is, as some say, “the place to reincorporate …

Contractual Remedies in Mergers: Lessons from Crispo v. Musk

By Dhruv Aggarwal, Albert H. Choi and Geeyoung Min July 22, 2024 by renholding

What remedy should a target be entitled to get from a breaching buyer in a merger transaction? This seemingly straightforward question has surprisingly vexed M&A practitioners and judges over the years.

With a public target, the buyer typically promises to …

Does the Moelis Decision Warrant a Quick Legislative Fix?

By Jill E. Fisch and Anat Alon-Beck June 10, 2024 by renholding

On February 23, 2024, the Delaware Court of Chancery issued its decision in West Palm Beach Firefighters’ Pension Fund v. Moelis & Company, which invalidated a stockholder agreement between Moelis & Company (the “Company”) and its founder and controlling …

Skadden Discusses Proposed DGCL Amendments’ Impact on Stockholder Agreements, M&A Practices

By Allison L. Land, Edward B. Micheletti and Lauren N. Rosenello April 24, 2024 by renholding

On March 28, 2024, the Council of the Corporation Law Section of the Delaware State Bar Association (DSBA) approved proposed amendments to the Delaware General Corporation Law (DGCL) in order to align the DGCL’s provisions with current market practices following

…

The Proposed 2024 Amendments to the Delaware General Corporation Law

By Richards, Layton & Finger April 3, 2024 by renholding

Legislation proposing to amend the General Corporation Law of the State of Delaware (the “DGCL”) has been approved by the Council of the Corporation Law Section of the Delaware State Bar Association and is expected to be introduced to the …