Our recent Client Advisory addresses the conversation that has emerged over the past several months as to whether Delaware should remain the favored state of incorporation for business entities. Specifically, it discusses various factors that entrepreneurs, investors, and companies should consider when weighing whether to remain in Delaware or to

Continue Reading Delaware’s Status as the Favored Corporate Home: Reflections and Considerations

Our recent Client Alert provides an overview of significant Delaware law developments of late.  The alert describes the Delaware Supreme Court’s ruling addressing controlling stockholder conflicts of interest in In re Match Group, Inc. Derivative Litigation, which will prove consequential in many transactions involving companies with large stockholders. In

Continue Reading Recent Delaware Law Developments and Proposed Legislative Responses

Our recent Client Alert discusses a February 23, 2024, decision issued by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery concluding that some provisions of a stockholder agreement purporting to give a large stockholder various governance rights—here, in the public company and investment bank Moelis—violated the Delaware statute by infringing upon the authority of the board of directors and were therefore invalid. Reviewing Delaware case law on board authority dating back to the early twentieth century, the court determined that the offending provisions—set forth in a stockholder agreement and not in the certificate of incorporation—operated as an improper constraint on board authority in violation of Section 141(a) of the Delaware General Corporation Law and interfered with the board’s authority to use its best judgment on management matters and policy. At the same time, the court concluded that some of the rights in question—particularly, the requirement to nominate the founder’s nominees for election and to use reasonable efforts for such nominees to be elected and to continue to serve as directors—were not facially invalid because they could operate legitimately under Delaware law. In particular, the court noted that stockholders have a fundamental right to nominate directors and that the corporation could appropriately take efforts, such as including the nominees in its proxy materials and on its proxy card, to cause the founder’s nominees to be elected and to serve on the board. Continue Reading Delaware Court of Chancery Addresses Validity of Stockholder Agreement-Based Restrictions over Corporate Governance Matters

Our recent Client Alert discusses that on February 20, 2024, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery issued an opinion refusing to dismiss stockholder claims challenging the reincorporation of TripAdvisor from Delaware to Nevada and determining that the entire fairness standard of judicial review, rather than

Continue Reading Delaware Court of Chancery Addresses Fiduciary Duty Claims Arising from Reincorporation to Nevada

We are pleased to present our 2023 Delaware Corporate Law and Litigation Year In Review.

In 2023, the Delaware courts issued many decisions addressing an array of important topics, including director and officer oversight obligations, the role of boards in navigating environmental, social, and governance issues, dual-class stock structures

Continue Reading 2023 Delaware Corporate Law and Litigation Year in Review

Our recent Client Alert discusses a significant decision issued by the Delaware Supreme Court on January 17, 2024, affirming that the Delaware General Corporation Law does not require companies with multiple classes of common stock to obtain separate class votes to amend their certificates of incorporation to provide for officer exculpation. The Supreme Court’s decision provides helpful certainty to multi-class companies that are considering adopting officer exculpation. Beyond the charter amendment context, the court’s opinion provides valuable guidance for how Delaware courts approach statutory interpretation and reaffirms the Supreme Court’s commitment to established precedent.

Continue Reading Delaware Supreme Court Affirms Important Ruling for Multi-Class Companies Concerning Class Votes

Our recent Client Alert discusses the June 27 decision issued by Vice Chancellor Lori Will of the Delaware Court of Chancery addressing the obligations of the board of directors of The Walt Disney Company (Disney) in overseeing Disney’s response to Governor Ron DeSantis and the “Don’t Say Gay” bill, or

Continue Reading Disney Prevails in Records Request Relating to Board’s Obligations in DeSantis Dispute 

The Delaware courts have issued several noteworthy decisions in recent weeks that should have an impact on practice and stockholder litigation. Below is a brief summary of these decisions, which involved the following issues:

  • The breach of a capitalization representation in a merger agreement and the resulting ability of the buyer to terminate the deal
  • The Tesla and Oracle litigations alleging, respectively, that Elon Musk and Larry Ellison were controllers and improperly caused those companies to acquire SolarCity and NetSuite
  • The “MFW” framework to cleanse controlling stockholder conflicts—and whether the Delaware Supreme Court will revisit that framework

Continue Reading Recent Developments in Delaware Case Law

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

Continue Reading Delaware Court of Chancery Issues Important Ruling for Multi-Class Companies Addressing Class Votes

Our Client Alert discusses the Delaware Court of Chancery’s recent issuance of a rare post-trial decision finding a CEO personally liable for millions of dollars in damages for breaching his fiduciary duties by tilting his company’s sale process in favor of his preferred acquiror and failing to disclose material facts about the sale process. Equally unusual, the Court of Chancery found the acquiror liable for monetary damages, on a joint basis with the CEO, for aiding and abetting the CEO’s breaches of fiduciary duty in providing inadequate disclosures to stockholders. The decision provides valuable insight into what Delaware courts expect of management and a board when selling a company, as well as the risks that can arise when a court determines that a sale process and related disclosures were improper.Continue Reading In Rare Decision, Delaware Court of Chancery Imposes Liability on CEO and Acquiror Post-Trial