“Good Faith” is Required Where Action Was “Obviously” Intended to be Conditioned on the “Absence of Bad Faith”

by The Delaware Counsel Group | Mar 13, 2017 | Law Updates, LU17

Dieckman v. Regency GP LP, et al. Limited partners of a publicly traded Delaware limited partnership (the “MLP”) claimed that the General Partner (the “GP”) of the MLP failed to satisfy the safe harbors provided in the MLP’s partnership agreement to cleanse a conflict...

Bylaws May Not Alter the Right to Remove Directors by a Majority Vote of Shareholders

by The Delaware Counsel Group | Mar 13, 2017 | Law Updates, LU17

Frechter v. Zier A corporate bylaw that permitted stockholders to remove directors with or without cause only upon the vote of “not less than 66 and two-thirds percent . . . of voting power of all outstanding shares” of the company was found to be invalid under...

Fee-Shifting Bylaws Are Prohibited No Matter How They Are Structured

by The Delaware Counsel Group | Jan 31, 2017 | Law Updates, LU17

Solak v. Sarowitz The Delaware Court of Chancery reviewed a shareholder’s challenge to a fee-shifting provision found in a forum-selection bylaw that required all internal corporate claims be brought in Delaware. The bylaw also provided that any shareholder “who fails...

What Information Must Be Disclosed to Minority Shareholders in a Short-Form Merger?

by The Delaware Counsel Group | Jan 31, 2017 | Law Updates, LU17

In re United Capital Corp. Stockholders Litigation The Delaware Court of Chancery was asked to award a quasi-appraisal to remedy a purported breach of the duty of disclosure in connection with a short-form merger. The merger, which was approved by a Special Committee...

Shareholder Vote Mandates Application of the Business Judgment Rule

by The Delaware Counsel Group | Jan 31, 2017 | Law Updates, LU17

In re Solera Holdings, Inc. Stockholder Litigation The Delaware Court of Chancery dismissed a complaint that alleged breach of fiduciary duty against directors that approved a merger. The Court concluded that the merger, which would generally have been subject to...

How to Establish a Board is Conflicted

by The Delaware Counsel Group | Dec 5, 2016 | Law Updates, LU16

Sandys v. Pincus, et al. The Delaware Supreme Court reversed a Delaware Court of Chancery decision that dismissed a derivative complaint based on the plaintiff-shareholder’s failure to make a pre-suit demand on the Company’s board of directors. The Court of Chancery...