Richards Layton & Finger
 

Proposed Amendments to the DGCL to Limit Applicability Of the Delaware Supreme Court's Holding in 'ATP Tour'

June 18, 2014

In ATP Tour, Inc. v. Deutscher Tennis Bund, the Delaware Supreme Court, responding to four certified questions of law from the U.S. District Court of the District of Delaware, held that a fee-shifting provision of a Delaware nonstock corporation’s bylaws applicable to intra-corporate disputes could be valid and enforceable (29 CCW 161, 5/21/14). Although the Court emphasized that it was only addressing whether the nonstock corporation’s bylaw was facially valid—and was expressly not addressing whether the bylaw or any application of it would be valid under a specified set of circumstances—the opinion resulted in a discussion among corporate law practitioners as to whether stock companies should consider adopting fee-shifting bylaws.