Stephanie Norman

2018 Proposed Amendments to the General Corporation Law of the State of Delaware

Insights   |   April 2018

Legislation proposing to amend the GeneralCorporation Law of the State of Delaware(DGCL) has been released by the CorporateCouncil of the Corporation Law Section ofthe Delaware State Bar Association and, ifapproved by the Corporation Law Section,is expected to be introduced to the DelawareGeneral Assembly. If enacted, the amendmentswould, among other things: (1) amendSection 262 to apply the…

The Delaware Supreme Court Provides Guidance on Directors’ Fiduciary Duty of Disclosure

Insights   |   April 2018

In Appel v. Berkman, the DelawareSupreme Court reversed the Delaware Courtof Chancery’sdismissal of claims relating to themerger of Diamond Resorts International,Inc. (“Diamond”), finding that the stockholdersof Diamond were not fully informedwhen they tendered their shares in a first-step tender offer followed by a back-end mergerunder Section 251(h) of the DelawareGeneral Corporation Law (DGCL). Inreversing the…

Proposed Amendments to Section 204 of the Delaware General Corporation Law Resolve Uncertainty Created by the Reasoning in Nguyen v. View, Inc.

In Our Opinion   |   Spring 2018

In 2017, the Delaware Court of Chancery in Nguyen v. View, Inc., 2017 WL 2439074 (Del. Ch. June 6, 2017), held in a proceeding brought pursuant to Section 205 (“Section 205”) of the General Corporation Law of the State of Delaware (the “DGCL”) that the consummation of a financing by View, Inc. (“View”) that required the…

The Limits of Ratification: Delaware Supreme Court and Director Equity Incentive Awards

Insights   |   January 2018

The Delaware Supreme Court recently overturned anopinion of the Delaware Court of Chancery holdingthat stockholder approval of an equity incentive planwith broad sub-limits on the number of shares availablefor grant to non-employee directors resulted inthe stockholders’ ratification of subsequent awards tothe directors. In essence, the Supreme Court held thatstockholders’ approval of an equity incentive plan willprovide…

Nguyen v. View, Inc.: The Delaware Court of Chancery Holds that Acts Deliberately Rejected by Stockholders Are Not Subject to Ratification under Section 204 of the Delaware General Corporation Law

In Our Opinion   |   Summer 2017

Since it became effective on April 1, 2014, Section 204 of the Delaware General Corporation Law (the “DGCL”) has served its purpose by enabling corporations to retroactively cure defects in their corporate records and by allowing corporate practitioners to give clean legal opinions as to, among other things, a corporation’s capitalization. As the Delaware courts have…

The Delaware Court of Chancery Revisits Director Equity Awards

Insights   |   May 24, 2017

The Delaware Court of Chancery recently held thatstockholder approval of an equity incentive plan thatincluded relatively broad sub-limits on the number ofshares available specifically for awards to non-employeedirectors provided “advance ratification” of subsequentawards to the non-employee directors. The Court’sopinion provides significant guidance to corporationsand practitioners in drafting and seeking stockholderapproval of equity incentive plans, and in…

Frechter v. Zier: Delaware Court of Chancery Provides Guidance on Supermajority Voting Provisions

Insights   |   March 31, 2017

In Frechter v. Zier, the Delaware Court of Chancery invalidated a bylaw that, on its own, purported to require a vote of two-thirds of the corporation’s outstanding voting stock to remove directors. The Court’s opinion provides guidance as to the implementation of supermajority voting provisions under the Delaware General Corporation Law (DGCL), including when such provisions…

Delaware Supreme Court Revisits Director Independence in Considering Derivative Demands

Insights   |   February 28, 2017

In a recent decision, the Delaware Supreme Court has provided insight into the factors the Delaware courts will consider in assessing director independence in the context of derivative suits. These factors include personal relationships and the board’s previous determinations under the stock exchange rules.…

Recent Delaware Court of Chancery Opinion Provides Guidance on Advancement and Indemnification

Insights   |   October 2015

A recent opinion of the Delaware Court ofChancery provides guidance on drafting indemnification and advancement provisions, and clarifiesthe circumstances under which a director or officer may or may not be entitled to advancement “byreason of the fact” of his or her service as such. TheCourt held, among other things, that a provision ofa certificate of incorporation…

Delaware Supreme Court Provides Guidance on Drafting Advance Notice Bylaws

Insights   |   July 2015

On July 2, 2015, the Delaware Supreme Courtin Hill International, Inc. v. Opportunity PartnersL.P., affirmed the Court of Chancery’s orderenjoining Hill International, Inc. (Hill) from conductingany business at its 2015 annual meeting,other than convening the meeting for the solepurpose of adjourning it for a minimum timeperiod necessary to allow Opportunity PartnersL.P. (Opportunity), the stockholder-plaintiff, topresent items…

New Delaware Court of Chancery Opinion Provides Guidance for Director Compensation Practices

Insights   |   June 2015

A recent opinion of the Delaware Court ofChancery, Calma v. Templeton, has broughtrenewed attention to the issue of directorcompensation. The opinion holds that directorcompensation decisions may not be subject tothe presumption of the business judgment rule,but may instead be reviewed under the entirefairness standard. However, it also addresses thecircumstances under which stockholder ratification of director compensation…

Court Sanctions Forum Selection Arrangements and Confirms Power to Restrict Books and Records Inspections

Insights   |   March 2015

In United Technologies Corp. v. Treppel, theDelaware Supreme Court unanimously reversedthe Court of Chancery’s ruling denying thedefendant’s request to restrict the use of informationobtained in plaintiff’s inspection ofbooks and records to actions in the Delawarecourts.

Recent Chancery Court Opinions on Ripeness

Delaware Business Court Insider   |   December 10, 2014

The Delaware Court of Chancery’s ruling in Pontiac General Employees Retirement System v. Ballantine, is the most recent statement on so-called “dead hand” proxy puts—the provisions in credit agreements that trigger an acceleration of the borrower’s indebtedness upon a change in amajority of its board within a specified timeframe.

Chancery Dismisses Stockholder Suit Over Expedia CEO Award

Delaware Business Court Insider   |   July 30, 2014

In Friedman v. Khosrowshahi, the Court of Chancery dismissed the plaintiff’s claims challenging the decision by the compensation committee of Expedia Inc. to accelerate the vesting of a restricted stock unit award. 

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

Corporate Counsel Weekly   |   June 18, 2014

In ATP Tour, Inc. v. Deutscher Tennis Bund, the Delaware Supreme Court, held that a fee-shifting provision of a Delaware nonstock corporation’s bylaws applicable to intra-corporate disputes could be valid and enforceable.

Klaassen v. Allegro: Implementing the Stockholders’ Agreement

Delaware Business Court Insider   |   December 4, 2013

In Klaassen v. Allegro Development, the Delaware Court of Chancery indicated that governance provisions included in stockholders’ agreements may be enforceable against the parties to those agreements, even if the provisions conflict with the certificate of incorporation or the DGCL.

Preserving (or Limiting) Contractual Claims to Address ‘Sandbagging’

Delaware Business Court Insider   |   July 24, 2013

The term “sandbagging” has been used generally in the M&A context to refer to the buyer’s assertion of post-closing claims for breach of representation and warranty despite its pre-closing knowledge that the seller’s representations or warranties were not true and correct when made.

The Equitable Case for Ratification

Delaware Business Court Insider   |   March 27, 2013

Among the many significant proposed changes to Delaware’s General Corporation Law that were submitted to the corporation law section of the Delaware State Bar Association this March for approval, the sections dealing with ratification of defective corporate acts stand out as particularly noteworthy.