Tag Archives: Corporate bylaws

Guest Post: After Cyan — Some Prognostications

As I discussed in a post last week, on March 20, 2018 the U.S. Supreme Court unanimously held in Cyan, Inc. v. Beaver County Employees Retirement Fund that the Securities Litigation Uniform Standards Act of 1998 (SLUSA) did not eliminate state courts’ concurrent jurisdiction to hear liability lawsuits alleging only violations of the Securities Act … Continue Reading

Lawsuit Challenging Minimum Stake to Sue Bylaw Dismissed

One of the more interesting recent developments in the world of corporate and securities litigation has been the litigation reform bylaw movement. Among the types of bylaws with which various companies have experimented are the forum selection bylaws (now permitted by statute in Delaware) and fee-shifting bylaws (now prohibited in Delaware for stock corporations, as … Continue Reading

A Q&A with Mark Lebovitch of Bernstein Litowitz: A Plaintiffs’ Counsel’s Perspective on the Fee-Shifting Bylaw Debate

One of the more significant recent developments in the corporate and securities litigation arena has been the emergence of the debate over fee-shifting bylaws following the Delaware Supreme Court’s May 2014 decision in ATP Tour, Inc. v. Deutscher Tennis Bund. Draft proposed legislation is now being considered by the Delaware legislature that would address fee-shifting … Continue Reading

Battle Builds in Delaware Over Fee-Shifting Bylaws

Earlier this year, after the Delaware Supreme Court upheld the facial validity of fee-shifting bylaws in the case of ATP Tour, Inc. v. Deutscher Tennis Bund (as discussed here), a legislative initiative quickly emerged to restrict the case’s holding to Delaware non-stock companies. However, the initiative proved to be controversial, and the legislative proposal was … Continue Reading

Who is an “Officer”? A Critical Inquiry for Indemnification and Insurance

Many companies provide advancement, indemnification and insurance benefits and protection for their officers and directors. However, it is not always clear who is an “officer” for purposes of claiming the benefits and protection. The long-running and high-profile saga of Sergey Aleynikov, the former Goldman Sachs computer programmer and company Vice President accused of stealing proprietary … Continue Reading

Delaware Chancery Court Upholds “North Carolina Only” Forum Selection Bylaw

  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 First … Continue Reading

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 … Continue Reading

Guest Post: Bylaws and Arbitration

For many years, business groups and corporate representatives have tried to reform shareholder litigation through legislation and case law development, with mixed success. However, in more recent years an interesting new initiative has emerged – the attempt to achieve litigation reform through amendments to corporate bylaws. This effort received a significant boost last year when … Continue Reading

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 the costs … Continue Reading

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 tool in … Continue Reading

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 to nonstock … Continue Reading

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 their … Continue Reading

Protection for Public Company Directors and Officers: Indemnification and Insurance

In an environment where public company directors and officers face increasing scrutiny and expanding liability exposures, the indemnification and insurance protections available to them are increasingly important. A July 15, 2013 memorandum from the Gibson Dunn law firm entitled “Director and Officer Indemnification and Insurance – Issues for Public Companies to Consider” (here) takes a … Continue Reading

More About Arbitration Clauses in Corporate By-Laws

In a recent post about the latest U.S. Supreme Court decision supporting arbitration, I speculated that the next step might be arbitration clauses in corporate bylaws, requiring shareholders to arbitrate shareholder claims. In response to my post, several readers alerted me that these issues had already been raised in a case involving CommonWealth REIT, though … Continue Reading
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