Following the Delaware Chancery Court’s June 2013 ruling upholding the facial validity of the bylaw of Chevron Corporation designating Delaware as the exclusive forum for intra-corporate disputes, the adoption of forum selection bylaws has become mainstream. But while a number of companies have now adopted forum selection bylaws, the circumstances surrounding the adoption by
Though Delaware Legislature Has Tabled Action, Upcoming Judicial Review of Fee-Shifting Bylaws Seems Likely
The Delaware Supreme Court stirred up quite a bit of controversy earlier this year in the ATP Tours, Inc. v. Deutscher Tennis Bund case when it upheld the facial validity of a fee-shifting by law. The bylaw provided that an unsuccessful shareholder claimant in intracorporate litigation would have to pay his or her adversaries’ cost
Delaware Legislative Proposal to Restrict Fee-Shifting Bylaws Held Over to Next Year
As I noted in a recent post (here), in response to a recent Delaware Supreme Court decision upholding the facial validity of fee-shifting bylaws, proposed legislation was introduced in the Delaware General Assembly to limit the Supreme Court’s ruling and to restrict the ability of Delaware corporations to utilize their bylaws to shift
A Call for Corporate Governance Reform in Spain
In an interesting June 11, 2014 Financial Times article entitled “Spain’s Renewal Must Include Governance Improvements” (here), financial journalist and commentator Tony Barber identifies corporate governance issues that he believes Spanish companies have been slow to address. According to Barber, while there may be historical explanations for many of the long-standing corporate governance
Delaware Corporate Bylaws: Even if the Company Can’t Fee Shift, it Can Still Forum Select
In light of the recent legislative initiative to restrict Delaware stock corporations’ use of fee-shifting bylaws, companies incorporated in Delaware have, as described in a recent Law 360 article (here, subscription required) a “smaller more defined toolbox” to reduce the burdens involved with shareholder suits. As it stands, the article notes, the “sharpest
Delaware Legislative Revision Proposed to Restrict Fee-Shifting Bylaws
As discussed in a recent post (here), in a May 8, 2014 decision the Delaware Supreme Court upheld the facially validity of a nonstock corporation’s bylaw provision shifting attorneys’ fees and costs to unsuccessful plaintiffs in intra-corporate litigation. Because the court’s holding seemed to be equally applicable to stock corporations as well as
The Latest on Arbitration Clauses in Corporate Bylaw Provisions
In a recent post, I noted the Delaware Supreme Court’s ruling upholding the validity of bylaw provisions shifting the costs of litigation to an unsuccessful intra-corporate litigation claimant, which is the latest in a series of judicial decisions in which courts have recognized the authority of corporate boards to address shareholder litigation concerns in
Delaware Supreme Court Upholds Fee-Shifting Bylaw Validity
In a development with significant implications for the economics of shareholder litigation, the Delaware Supremee Court has upheld the validity of a corporate bylaw provision shifting fees to an unsuccessful litigant. In a May 9, 2014 opinion (here), the Court held in ATP Tour, Inc. v. Deutscher Tennis Bund that a by-law provision
Is a Remote Annual Meeting Venue an Indicator of Corporate Risk?
Those interested in trying to identify possible corporate risk indicators will want to take a look at a March 18, 2014 paper by Temple University finance professor Yuanzhi Li and New York University finance professor David Yermack entitled “Evasive Shareholder Meetings” (here). According to the authors’ research, there is a strong negative correlation
The Complex Conflicts Minerals Disclosure Challenge
The SEC’s conflicts minerals disclosure rules, promulgated as required under provisions of the Dodd-Frank Act, became effective on January 1, 2013, requiring companies to make their first conflict minerals disclosures on or before May 31, 2014 for the 2013 reporting year, as I detailed in a recent post. But though it is widely recognized