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Delaware General Corporation Law Contract Terms

WilmerHale

Delaware Forum Selection Clause Binds California Shareholders

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The California Supreme Court handed a major victory to Delaware corporations facing shareholder litigation in California courts but left open questions about how durable the success will be. In EpicentRX v. Superior Court...more

Cadwalader, Wickersham & Taft LLP

Court of Appeals Upholds Contract Merger Clause

In Behler v. Kai-Shing Tao, the New York Court of Appeals found that the merger clause contained in a limited liability company agreement governed by Delaware law superseded an alleged prior oral agreement between the...more

Jenner & Block

Validity of Stockholder Agreements with Delaware Corporations

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Effective August 1, 2024, the Delaware General Corporation Law (“DGCL”) was amended to include a new Section 122(18), pursuant to which corporations are expressly permitted to enter into contracts that: 1. restrict or...more

Hogan Lovells

Delaware court finds corporate charter cannot incorporate private agreement by reference

Hogan Lovells on

In Seavitt v. N-able, 321 A.3d 516 (Del. Ch. 2024), decided prior to the amendment of the Delaware General Corporate law to add Section 122(18), the Delaware Court of Chancery held that the “public nature of a charter” means...more

Troutman Pepper Locke

A Sharper Focus: Exploring VC Side Letters

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A side letter in the venture capital sector is an agreement between an investor and the company it is investing in that entitles the investor to certain contractual rights, which supplement and are in addition to other rights...more

Troutman Pepper Locke

Delaware Corporate Charters Cannot Incorporate Provisions of Third-Party Agreements by Reference

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In Seavitt v. N-able, Inc., the Delaware Court of Chancery held that certain governance rights granted to a corporation’s significant stockholders were statutorily invalid. This included a provision purporting to allow those...more

Fenwick & West LLP

Delaware Adopts Important Amendments to Its General Corporation Law

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On July 17, 2024, Delaware Gov. John Carney signed into law significant amendments to the Delaware General Corporation Law (DGCL), which will become effective on August 1, 2024. The amendments were articulated in Delaware...more

Winthrop & Weinstine, P.A.

Winthrop & Weinstine Team Obtains Jury Trial and Appellate Wins for American Distributor

This month, our appellate team comprised of Gerry Fornwald, Kyle Kroll, and Cianna Halloran prevailed at the Third Circuit Court of Appeals in obtaining victory for our client, an American distributor. The case involved a...more

Cadwalader, Wickersham & Taft LLP

Sjunde AP-Fonden v. Activision Blizzard Inc.: What May be Common May not be Right

In another impactful decision, the Delaware Court of Chancery in Sjunde AP-Fonden v. Activision Blizzard Inc. again stressed the importance of the statutory text of the DGCL to dismiss claims by the plaintiffs alleging that...more

Nutter McClennen & Fish LLP

M&A in Brief: Q1 2024

In a letter ruling, the Delaware Chancery Court held that where neither the target nor the acquiror was a Delaware entity, the transaction documents between the parties could not confer jurisdiction in the Chancery Court...more

Troutman Pepper Locke

“Market Practice Needs to Check Itself” – A Reminder from the Court of Chancery that M&A Practitioners Must Strictly Abide by...

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In Sjunde AP-Fonden v. Activision Blizzard, Inc., the Delaware Court of Chancery refused to dismiss claims against Activision Blizzard, Inc. (the company) and its board of directors (the board) that the board had violated,...more

Goodwin

Delaware Court of Chancery Invalidates Governance Rights in Stockholder Agreement

Goodwin on

On February 23, 2024, the Delaware Court of Chancery issued a decision in a class action lawsuit (West Palm Beach Firefighters’ Pension v. Moelis & Co.) that concluded most of the control provisions in a stockholder agreement...more

Robson & Robson, P.C.

Sellers Beware: Sandbaggers Welcomed In Pennsylvania & Delaware

Robson & Robson, P.C. on

Image a home buyer finally finds their dream house. There’s just one problem. During their home inspection, they discover the foundation is cracked. But they buy the house anyway, fully aware of the issues with the...more

Bilzin Sumberg

Delaware Court Upholds “Sandbagging,” But Policy Concerns Linger

Bilzin Sumberg on

It’s a situation that, at least theoretically, could happen many times every business day, all across the country, given how often businesses choose to have Delaware law apply to their contracts. A party (the seller or...more

Farrell Fritz, P.C.

Anti-Dissolution Provisions and Public Policy

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In Congel v Malfitano, New York’s highest court wrote that business partners are free to include in partnership contracts practically “any agreement they wish,” including about “the means by which a partnership will dissolve,...more

Gray Reed

Key 2021 Amendments to Delaware Business Entity Statutes

Gray Reed on

This article summarizes key amendments to the Delaware General Corporation Law (“DGCL”), Delaware Limited Liability Company Act (“DLLCA”), Delaware Revised Uniform Partnership Act (“DRUPA”) and Delaware Revised Uniform...more

Stinson - Corporate & Securities Law Blog

“Too Much Dynamite” Can Override Indemnification Limitations

Online Healthnow, Inc. et al v. CIP OCL Investments, LLC et al considers whether certain indemnification limits violate the public policy of the State of Delaware....more

Hogan Lovells

Quarterly Corporate / M&A Decisions Update: Q4 2020

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Below is our Quarterly Corporate / M&A Decisions Update for decisions in Q4 2020. This update is designed to highlight selected important M&A, corporate, and commercial court decisions on a quarterly basis. Brief summaries of...more

Stinson - Corporate & Securities Law Blog

Fee-Shifting Provision in Stockholders Agreement Does Not Violate Delaware Law

Manti Holdings, LLC, et al. v. Authentix Acquisition Company, Inc. considered whether a “loser pays” fee-shifting provision in a stockholders’ agreement violated Delaware law.  In 2008, the Petitioners had all held stock in a...more

Skadden, Arps, Slate, Meagher & Flom LLP

Court of Chancery Dismisses Consent and Unconscionability Claims Challenging Contract Between Parent and Wholly Owned Subsidiary

On March 30, 2020, in The Chemours Company v. DowDuPont Inc., et al., C.A. No. 2019-0351-SG (Del. Ch. Mar. 30, 2020), the Delaware Court of Chancery issued an important decision reaffirming bedrock principles of Delaware...more

Carlton Fields

Valuing Income Statement Breaches in Transactional Insurance Claims

Carlton Fields on

Once it has been determined that a breach of a financial statement representation in an acquisition agreement has occurred—specifically with respect to an identified income statement—the question arises as to the quantum of...more

Farrell Fritz, P.C.

Advance! Amend! Retreat!

Farrell Fritz, P.C. on

The title of this post describes not an army maneuver, but the outcome of a recent lawsuit in Delaware Chancery Court for advancement of litigation expenses in which...more

Herbert Smith Freehills Kramer

Delaware Court of Chancery Upholds a Seller’s Use of Contractual Provisions to Maintain Attorney-Client Privilege Over Premerger...

In a recent decision, the Delaware Court of Chancery ruled that the seller in a merger could enforce a provision in the merger agreement protecting its privilege over premerger emails with its counsel. Although pursuant to...more

White and Williams LLP

Delaware Chancery Court Addresses the Seller’s Preservation of Privilege Post-Closing

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Preserving privilege with respect to pre-closing communications between a selling corporation’s counsel and its management is an important negotiation point in many transactions, so that the seller can prevent the buyer from...more

White and Williams LLP

The Dangers of Copy and Paste: Using Corporate Statutory Language in an LLC May Result in Unintended Consequences

White and Williams LLP on

Limited liability companies (LLCs) are famously referred to as “creatures of contract”, whereas the governance of a corporation is comparatively fixed by statute. When forming an LLC, the members have broad discretion to...more

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