"I see the bad moon arising, I see trouble on the way
I see earthquakes and lightnin', I see bad times today"*
Delaware had barely birthed changes to Section 144 of its General Corporation Law when the Plumbers & Fitters Local 295 Pension Fund filed a complaint challenging those changes. The plaintiff seeks a declaration that the amendments to Section 144 are unconstitutional under the Delaware constitution. The named defendants are Dropbox, Inc. and its directors. Dropbox reincorporated from Delaware to Nevada on March 5 of this year, 20 days before Delaware Governor Matt Meyer signed the amendments to Section 144 into law.
According to a recent post by John Jenkins at DealLawyers.com, the plaintiff filed the complaint under seal but the challenge may be premised on the notion that the Delaware General Assembly doesn’t have the authority under Delaware's constitution to constrain the Chancery Court’s equitable jurisdiction to less than what it was in 1792. If that is the case, then according to John "other significant statutory provision of Delaware law may be at risk". In particular, he notes "the ability of LLCs to avoid judicial review of provisions in their operating agreements purporting to waive fiduciary duties also may run afoul of Delaware’s constitution".
_____________________
*John Fogerty, Bad Moon Rising.
[View source.]
