Delaware Business Court Insider

Administrators express hope that admission changes will fill need for Delaware attorneys

Delaware Business Court Insider

A judicial report was recently released detailing steps that have been taken in the past two years to increase diversity on Delaware’s bench and bar, the bulk of which involve creating a pipeline of future Delaware attorneys through increased access to education and bar admission.

That has included lowering the bar cut score by two points, cutting back on essay questions, reducing the length of clerkships required, narrowing the checklist of legal proceedings prospective attorneys need to sit in on and lowering late application fees.

Those involved with the bar admissions process say more time is needed to say for sure whether the changes will lead to more attorneys practicing in Delaware, but that early signs have been promising.

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‘Match’ opinion stresses Delaware courts’ focus on investors, scrutiny of controlling shareholders

Delaware Business Court Insider

Delaware courts are not making it easier to get the business judgment rule applied in corporate transaction cases.

On top of more specific guidance about what exactly makes a director committee independent in the context of Kahn v. M&F Worldwide Cleansing cleansing, that’s been the corporate bar’s big takeaway from the Supreme Court’s ruling on Match Group Inc. shareholder litigation.

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Why corporate attorneys say Delaware courts aren’t pushing away their clients

Delaware Business Court Insider

Elements of Delaware law that affect large swaths of corporate litigation are in flux: Delaware’s application of entire fairness is evolving, as is how it defines conflict and control in transactions. The Court of Chancery has reviewed and invalidated advance notice bylaws, and lawyers have asked for guidance on just how much say shareholders get in converting out of Delaware.

All of those issues have raised questions that attorneys are waiting for the Delaware Supreme Court to address, which could mean guidance corporate lawyers give their clients in the interim may need to be revisited later. Litigators—especially those on the defense side—have expressed frustration, and some say Delaware now stands in shareholder-friendly opposition to Nevada’s deference to corporations.

But behind the scenes, corporate practitioners say, there’s been no signs that there will be any significant corporate exodus from Delaware in the near future, and it’s a concern that’s being closely watched but is rarely being mentioned in the boardroom, indicating companies like Tesla, TransPerfect and TripAdvisor are in the minority despite their conversions to Texas and Nevada grabbing attention.

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Here’s how Elon Musk’s $56B executive comp loss could reverberate

Delaware Business Court Insider

Shortly after Chancellor Kathaleen St. J. McCormick issued her post-trial opinion finding Elon Musk’s $56 billion compensation agreement with Tesla should be rescinded, Musk posted on his X (formerly Twitter) app one possible takeaway: “Never incorporate your company in the state of Delaware.”

For litigators who practice in the Court of Chancery or otherwise represent Delaware corporations or their shareholder, there may be more nuanced guidance that the opinion may offer for future litigation or how to avoid it.

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Four lessons from Delaware corporate litigation you should have learned in 2023

Delaware Business Court Insider

While another year in the Delaware courts has gotten sporadic attention from one-off appearances of household names and national political controversies, the litigation events of 2023 that will likely have the most impact moving forward are, as usual, the ones that garner attention from the small bar that litigates the world’s biggest business deals.

The Court of Chancery and Delaware Supreme Court hammered home these points multiple times throughout 2023, signaling to litigators that they may want to keep them in mind as they head into the new year.

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SCOTUS’ Purdue Pharma position could shake up Boy Scout settlement, objectors say

Delaware Business Court Insider

The U.S. Supreme Court has only agreed to consider one Chapter 11 bankruptcy plan that includes billions in settlement funds and contested release terms, but its decision—affecting the opioid settlement—has the potential to make or break a second mass tort resolution, lawyers said.

Both Purdue Pharma and the Boy Scouts of America have approved plans that release the claims of third parties without requiring those parties’ consent. In both cases, objectors say bankruptcy courts don’t have the authority to approve plans that include that type of release.

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What’s fair enough is fair: Entire fairness decisions show M&A perfection not required

Delaware Business Court Insider

Several recent decisions of the Delaware Court of Chancery—and the state Supreme Court’s response to them—have signaled that for corporate defendants, the threat of having the entire fairness standard applied doesn’t mean all hope is lost when defending a transaction challenged by shareholders.

In a little less than 18 months, two Chancery cases have followed a similar path: entire fairness applied in a case where a party had connections to companies on both sides of a deal. The case survived the motion to dismiss stage and went to trial. The court found that neither the conflicted party’s involvement in the negotiation process nor the price the acquiring corporation ultimately agreed to pay made for a deal unfair enough to overturn. And as of this summer, the Supreme Court agreed.

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FTX attorneys’ billing far outpaces hourly rates seen in 2008 mega bankruptcies

Delaware Business Court Insider

Attorneys and consultants involved in the FTX bankruptcy have asked the District of Delaware bankruptcy court to approve billed hours and expenses totaling just under $37 million for the first six weeks of Chapter 11 proceedings.

Those proposed fee applications, the last of which was filed Feb. 27, cover both the FTX debtor entities and the committee representing creditors, with the largest segment by far being the $25.1 million billed by FTX lead counsel Sullivan & Cromwell across two filings. Those fees haven’t been approved or denied and could end up differing from the amount attorneys actually are paid.

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Shareholder tensions rise as corporations consider limiting officer liability

Delaware Business Court Insider

Delaware corporations and their shareholders have over the last few weeks begun navigating the recently enacted law allowing them to limit corporate officers’ liability, with the first vote approving the change closely followed by the first lawsuit on the issue.

The law, which went into effect Aug. 1, is thought by some to be in effect little more than a formality, extending officers the same exculpations board members have had for years in Delaware, but others are concerned by the impact on options shareholders would have when making breach of duty of care claims.

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‘Mindbogglingly expansive’: Twitter blasts Musk’s discovery demands as parties blame each other in scheduling row

Delaware Business Court Insider

Twitter and Elon Musk indicated this week they’re at a standstill in scheduling dates for their broken deal trial, asking Chancellor Kathaleen McCormick to weigh in.

The Musk team claimed in a letter sent Tuesday that Twitter is intentionally holding up discovery in an effort to give Musk as little time as possible to analyze the data he’s requested, and Twitter fired back in a motion filed the next day that Musk has made setting dates impossible by making unreasonable requests and refusing to make any concessions to the other side.

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