corporate law

Here’s what corporate litigators expect Delaware courts to address in 2025

Delaware Business Court Insider

Delaware ended 2024 with some litigation cliffhangers, leaving corporate attorneys seeking answers from the Delaware Supreme Court on several issues that were addressed in the Court of Chancery.

One area of Delaware law that came up frequently in 2024 and is expected to continue to be closely watched as more case law is established is that of conflicted controller transactions, specifically what exactly constitutes such a transaction and how judicial scrutiny can be applied to one.

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Even with new business courts, Texas is a long way from taking Delaware’s corporate law mantle

Delaware Business Court Insider

Texas has a new system of business courts up and running on the heels of an ongoing conversation about Delaware’s corporate primacy.

While Texas attorneys have been upfront with their hope that the state’s newest courts will help raise Texas’ corporate law to Delaware’s level, corporate attorneys across the country are all but unanimous: Delaware remains the champ, and that’s not changing, at least not any time soon.

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Here’s what Texas attorneys are expecting from the state’s new business courts

Delaware Business Court Insider

The first handful of cases have been filed in Texas’ business courts, and Texas attorneys are looking forward to seeing how their dockets continue to unfold.

Many are optimistic about the courts’ potential but expect it will take at least a year to build up the jurisprudence that could make them a reliable venue for business litigation.

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How corporate law legislation morphed into a conversation on judicial ethics

Litigation Daily

Two weeks ago, Delaware enacted a series of amendments to its corporation law, as it does every summer. 

Unlike every other summer, two weeks after the amendments went into effect, those who watch the Court of Chancery closely are still offering public critique. But alongside that discussion, a secondary debate has broken out about when judges on the Court of Chancery, with its signature decorum, should and should not weigh in on laws they will later apply to Delaware’s corporate franchise.

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‘A big black box’?: What to expect now that the DGCL has been amended

Delaware Business Court Insider

Amendments to the Delaware General Corporation Law approved by the legislature and Gov. John Carney become effective Aug. 1, generally addressing three areas of corporate governance in response to three Court of Chancery decisions issued within the past year.

The latest batch of changes has seen less unanimous support from the corporate bar than the amendment process usually does, with one area in particular drawing criticism: In response to Moelis & Co. shareholder litigation decided in February, Section 122 will now allow corporate boards to use their discretion to sign agreements giving governance rights to shareholders they previously could not have under Section 141(a).

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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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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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