Our recent Client Alert discusses an important ruling issued by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery on March 29, 2023. This ruling concluded that two companies with multiple classes of common stock were not required, under the Delaware statute, to obtain separate class votes of their stockholders in order to amend their certificates of incorporation to provide for exculpation of their officers.* Those charter amendments took advantage of the recent amendments to the Delaware General Corporation Law (the DGCL) permitting Delaware corporations to provide in their certificates of incorporation that, akin to protections long afforded to directors, specified officers of the corporation can be protected from monetary liability for certain breaches of fiduciary duty—specifically, direct, though not derivative, claims by stockholders asserting a breach of the duty of care. This ruling, pending any appeal, is good news for dual-class companies seeking to amend their charters to implement officer exculpation and will also have broader implications for private and public companies assessing whether to seek a class or series vote of stockholders for other charter amendments. Wilson Sonsini is representing one of the defendant companies in the case.

* Elec. Workers Pension Fund, Local 103, I.B.E.W. v. Fox Corp., C.A. No. 2022-1007-JTL.