The ban on fee-shifting bylaws is temporarily defeated — four points for public companies
The Delaware state senator responsible for introducing a proposed ban on fee-shifting bylaws has instead sponsored a resolution — unanimously passed in the Delaware state senate — to delay any vote on the proposed ban until 2015.
The delay, introduced on 18 June, came amid intense lobbying against the proposed legislative ban by the US Chamber of Commerce and reportedly at least one large Delaware-headquartered corporation. The proposed ban also enjoyed support from the governor of Delaware and, perhaps not coincidentally, a key Delaware shareholders’ trial lawyer and reported fundraiser for the governor.
What now? A principle reason that companies incorporate in Delaware is the certainty underlying Delaware corporate jurisprudence. While a fight over the ban has been put off for at least six months, public company boards of directors are left with a quandary. The Delaware Supreme Court’s decision in ATP Tours Inc v Deutscher Tennis Bund opened the door for fee-shifting bylaws as being ‘facially valid’, at least for non-stock corporations — and thus presumably regular stock-issuing corporations as well — subject to adoption by a board after due deliberation for a ‘valid corporate purpose’…
Click on the link below to read the rest of the DLA Piper briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
The Australian Taxation Office released a draft ruling on the Goods and Services Tax treatment of bitcoin transactions on 20 August 2014.
DLA Piper’s ‘Life sciences: patent extension strategies and antitrust global update’ video covers global antitrust and competition issues including product hopping and reverse payment patents.
Analysis from The Lawyer
Cross-border work and political tensions are dominating this year’s entries for Finance Team of the Year at The Lawyer Awards.
Regulators are ramping up the pressure in the aftermath of recession, leaving firms to compete for compliance and restructuring work