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Skadden Discusses Proposed 2022 Amendments to Delaware Corporation Law
On April 12, 2022, the Corporation Law Section of the Delaware State Bar Association (DSBA) approved proposed amendments to the Delaware General Corporation Law (DGCL) that include provisions that, if enacted, would authorize exculpation clauses limiting or eliminating the monetary …
Skadden Discusses Delaware Law Authorizing Captive Insurance for D&O Coverage
On February 7, 2022, Delaware’s governor signed a bill amending the Delaware General Corporation Law (DGCL) to expressly authorize Delaware corporations to purchase and maintain directors’ and officers’ (D&O) liability insurance by or through captive insurance companies. This amendment, described …
Skadden Discusses Waiver of Appraisal Rights Upheld by Split Delaware Supreme Court
In Manti Holdings, LLC v. Authentix Acquisition Co., Inc., the Delaware Supreme Court affirmed the Court of Chancery’s decision to enforce a waiver of appraisal rights included in a stockholders agreement executed by “sophisticated parties” who owned 100% of the …
Weil Gotshal Discusses Boeing Decision and Board Oversight of Product Safety Risks
The Delaware Court of Chancery’s recent decision denying a motion to dismiss in In re The Boeing Company Derivative Litigation, 2021 WL 4059934 (Del. Ch. Sept. 7, 2021), reminds directors and their counsellors of the importance of board and …
Wachtell Lipton Discusses Recent Developments with DGCL Section 220 as Pre-Complaint Discovery
Two recent decisions of the Delaware courts confirm that Section 220 of the Delaware General Corporation Law will be consistently interpreted to grant pre-complaint discovery to stockholders seeking to prepare fiduciary-breach litigation.
In Pettry v. Gilead Sciences, Inc., a …
Sullivan & Cromwell Discusses Amendments to Delaware’s General Corporation Law
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, …
Separating Voting and Control: Shareholder Agreements and Corporate Governance
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 – …
How “Books and Records” Rewrote the Rulebook
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 …
Leveraging Corporate Law: A Broader Account of Delaware’s Competition
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 …
“If I Agreed With You, We’d Both Be Wrong:” Section 11 Claims as “Internal Corporate Claims” Under DGCL 115
Amazon, eBay, Etsy, and Pinterest offer hundreds of items, from t-shirts to coffee mugs to posters, warning against agreement for the sake of agreement.* My wife has, on more than one occasion, reminded me of the danger.[1] And now, …
Skadden Discusses When It Makes Sense to Prepay Appraisal Claims
In response to the growing practice of “appraisal arbitrage,” in 2016 Delaware’s General Assembly amended the state’s appraisal statute, Section 262 of the Delaware General Corporation Law. The amendment to Section 262(h) granted corporations the option to “prepay” appraisal claimants …
Fried Frank Discusses Key Delaware Decisions on M&A and Corporate Governance
New Risk of Below-Deal-Price in Appraisal Results
Last quarter, the Delaware courts issued the first post-Dell appraisal decisions—Aruba and AOL (issued by the Court of Chancery) and SWS Group (issued by the Delaware Supreme Court, affirming the Court …
Cahill Gordon Discusses Proposed Amendments to Delaware Corporation Law
The Corporate Council of the Corporation Law Section of the Delaware State Bar Association (the “Corporate Council”) has released proposed legislation[1] to amend certain provisions of the Delaware General Corporation Law (“DGCL”) which if enacted would, among other things, …
Appraisal Arbitrage and Shareholder Value
How State Competition for Corporate Charters Has Changed the Delaware Effect
An important feature of U.S. corporate law is regulatory competition among various states. Unlike firms in other industrialized countries, American corporations can choose to incorporate in any state, even if they do not do business there. A large body of …
How Shareholder Approval Rules Affect the Forms of Mergers
While all acquisitions require approval from target shareholders, the necessary level of shareholder support varies across jurisdictions and deal structures. Some transactions can be approved by a simple majority of target shareholders, while others require super-majority approval. In our paper, …
Morrison & Foerster Explains How Delaware Paves the Way for Blockchain Technology
Following last May’s announcement of the “Delaware Blockchain Initiative” by former Delaware Governor Jack Markell[1], on March 13, 2017, the Corporate Council of the Corporation Law Section of the Delaware State Bar Association released groundbreaking draft legislation proposing …
The Upside of Delaware Limits on Fee-Shifting and Forum Selection Provisions
Until very recently, it was not controversial to claim that shareholder litigation had entered a period of crisis. A significant majority of deals involving publicly-traded corporations (most of which are organized in Delaware) were challenged in litigation, and to make …
Shearman & Sterling explains Compliance with the Formal Approval Requirements of Delaware Law Required for Stockholder Ratification of Director Compensation
On October 28th, the Delaware Chancery Court, in Espinoza v. Zuckerberg, et al. (“Espinoza”)[1], held that stockholder ratification of a transaction that was approved by an interested board of directors must be accomplished formally through a vote …