enterprise

Do sharpened definitions in Delaware’s corporate law amendments afford a ‘clear playbook’ or place Chancery in ‘straitjacket’?

Delaware Business Court Insider

Much of the debate about Delaware Senate Bill 21 stems from proposed amendments to Section 144 of the DGCL, including more concrete parameters for who qualifies as a controlling shareholder, what makes a director independent and how a deal can be shielded from the entire fairness standard.

Supporters of SB 21, which has been passed by the Senate and is scheduled to go before the House Judiciary Committee this week, say the so-called safe harbor procedures outlined in the legislation would give corporations clarity on how to properly proceed with a transaction and ultimately cut down on the number of transactions challenged in the Court of Chancery.

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‘This Is Our Industry’: Why lawyers say Delaware’s economic future turns on bill to amend corporate law

Delaware Business Court Insider

Whether wide-ranging revisions to Delaware corporate law in Senate Bill 21 are accepted or rejected, advocates on both sides say there will be fallout for Delaware’s economy and the corporate and legal work that drives it.

Those who oppose SB 21 say they’re worried it would be detrimental to Delaware’s legal industry, with less corporate work available for law firms as breach of fiduciary duty cases that would otherwise be litigated in the Court of Chancery and appealed to the Delaware Supreme Court are precluded by the changes proposed in the bill, while legislators, lawyers and other Delawareans who have expressed support for the bill posit that without a course correction, the state will hemorrhage corporations and the revenue they provide, jeopardizing funding for government operations and public services.

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Here’s why SB 21’s drafting process has gotten as much heat as its content

Delaware Business Court Insider

It’s the second consecutive year in which legislation proposing amendments to the Delaware General Corporation Law has been criticized both for its content and for the process through which it was drafted and sent through the Legislature.

So far, SB 21’s legislative progression hasn’t been outright faster than that of the most recent bills proposing DGCL amendments in prior years. Last year, SB 313, containing what were referred to as “market practice amendments,” was passed by the Senate 22 days after introduction, and the chamber passed the 2023 DGCL amendment bill 12 days after its introduction. The Senate approved SB 21 on March 13, 23 days after it was first introduced.

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How may US judges vet experts for jurors? The new evidence rule set to take effect is sparking debate

Delaware Law Weekly

An upcoming change to a federal evidence rule has garnered support from those who say judges have not been consistently stringent in evaluating expert testimony post-Daubert, but critics say it’s a push for an unfair defense bar advantage billed as a crackdown on junk science at trial.

The update to Rule 702, set to go into effect officially on Dec. 1, has raised the issue of whether it’s a long overdue way to hold judges to an evidentiary standard they should have been following for decades or if it encourages them to cross over into the jurors’ domain.

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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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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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