Delaware Court of Chancery Validates Defective Acts and Clarifies Limited Scope of Dually Direct and Derivative Claims
September 2018
Publication
In Almond v. Glenhill Advisors LLC, the DelawareCourt of Chancery provided significant guidanceregarding the circumstances under which it would useits equitable powers under Section 205 of the DelawareGeneral Corporation Law (DGCL) to validate actsthat, due to technical failures in authorization, wouldbe void or voidable (and thus potentially give rise toclaims for rescission or rescissory or other damages).The Court also provided further clarity to the narrowcircumstances under which claims for breach of fiduciaryduty involving allegations of overpayment couldbe brought both directly and derivatively.