Delaware Chancery Court Questions Use of Advance Notice Bylaw
June 27, 2012
Publication| Corporate & Chancery Litigation
In HealthCor Management v. Allscripts Healthcare Solutions, C.A. No. 7557-CS (Del. Ch. May 25, 2012) (Transcript), the Court of Chancery made a few noteworthy observations regarding the use — and potential limitations — of advance notice bylaws. The court granted the plaintiffs’ motion to expedite in a case involving a challenge to Allscripts’ use of its advance notice bylaw to prevent the plaintiff from nominating a short slate of directors. The plaintiffs claimed that, due to a fundamental, unanticipated and unforeseeable change in governance at Allscripts — namely, the resignation, shortly before the annual meeting, of Allscripts’ chief financial officer and four of its nine directors — they should be excused from complying with the time periods set forth in the bylaw.