corporate law

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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Corporations are (made up of) people, too: How corporate lawyers are dealing with juror mistrust

Law.com

Masks and plexiglass dividers in jury boxes might be on their way out as the pandemic fades, but there’s a growing trend among jurors that’s only getting stronger: skepticism toward the big, bad, faceless corporation.

That’s led many who represent companies to place more of an emphasis on humanizing their clients in an effort to offset jurors’ growing David-and-Goliath mindset in cases pitting a large corporation against one person or a smaller entity.

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Great exSPACtations: Practitioners say Delaware will set tone for new post-merger litigation

Delaware Business Court Insider, Delaware Law Weekly

Nearly as fast as SPACs themselves rose in popularity, shareholders have started filing litigation against the acquisition companies that have closed their deals.

Aside from securities cases filed in federal courts, Delaware’s Court of Chancery is the primary venue where corporate litigators are watching and waiting to see how the increasingly common companies are treated compared to others involved in M&A and breach of fiduciary duty litigation, with just a handful of cases expected to lay out the scope of SPAC shareholders’ and directors’ rights and duties, as well as how, or if, shareholders will be able to make similar claims in the future.

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New demand futility test expected to streamline litigation in derivative lawsuits

Delaware Business Court Insider

The Delaware Supreme Court’s decision last week to do away with a two-test system will likely lighten litigators’ workload across the board in derivative cases, experts say.

The opinion Justice Tamika Montgomery-Reeves wrote in a Facebook shareholders case replacing the separate but long-muddled Aronson and Rales tests with a single three-step test that combines the two is expected not to change the results of testing for demand futility, but to drastically simplify and make consistent the path to those results.

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