Delaware Supreme Court upholds fee-shifting provision in company bylaw, signifying a future sea change in corporate litigation
By Jay Coogan and John L Reed
The Delaware Supreme Court, sitting en banc, has held that a Delaware corporate bylaw that requires a losing claimant to pay the legal fees and expenses of the defendants is not invalid per se, and if otherwise enforceable can be enforced against losing claimants whether or not they were already stockholders when the relevant bylaw provision was adopted.
The court’s ruling in ATP Tour Inc et al v Deutscher Tennis Bund et al was in response to four certified questions from the US District Court in Delaware, which had been considering whether to enforce the bylaw provisions in question in a dispute between ATP Tour and some of its members.
In 2006, the board of directors of ATP Tour, a Delaware non-stock (also known as a membership) corporation, adopted a bylaw providing that if any member or members brought or supported a claim against the corporation or any other member, the claimant would then be obligated (and if more than one claimant, jointly and severally obligated) to pay the legal fees and expenses of those against whom the claim was brought if the claimant ‘does not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought’. Members of ATP Tour filed claims against the corporation and the board as a result of certain changes to the importance and timing of their tournaments, and the district court, having found for the defendants on all counts, certified the question of the fee-shifting provision to the Delaware Supreme Court…
Click on the link below to read the rest of the DLA Piper briefing.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
Philippines president Benigno Aquino III has signed into law Republic Act 10641, ‘An Act Allowing the Full Entry of Foreign Banks in the Philippines’.
As you structure the features of developer notes, the following principles may help you maximise their marketability.
Analysis from The Lawyer
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.
A new breed of lawyer is smoothing the path for companies entering emerging or unstable jurisdictions