law

Texas updated its business code. Here’s what corporate litigators still want to know.

Law.com

Since the Texas Legislature established new business courts, attorneys with an eye on corporate governance litigation have sought more information about how those courts might differ from or align with Delaware’s Court of Chancery and other states when it comes to an array of issues including procedure and standing.

While some answers have come from the bench in the first 10 months of the business courts’ operation, more questions were answered this year in the form of Texas Senate Bill 29, which delineated several ways corporate litigation in Texas compares to litigation in other jurisdictions.

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Foot fault? Del. courts weigh when harm from corporate bylaws is beyond theoretical

Litigation Daily

Imagine you’re playing tennis. You’re about to serve, but the line judge stops you. You stepped over the baseline before you hit the ball. There’s a small but persistent group of people who travel from one tennis match to another, focused solely on trying to catch people making that same misstep and getting officials to make a call penalizing them for it.

Maybe you and some others are critical of that small group and believe they’re making a big deal out of a harmless error. But it could be argued that a harmless error still breaks the rules, and maybe that small group is doing something good by trying to catch them.

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A brief history behind DExit and the biggest beef in Del. corporate law

Litigation Daily

When I’m not covering corporate litigation, one of my guilty pleasures is watching reality television shows on Bravo.

Now that Tom Girardi is done with both, corporate litigation and Bravo don’t typically have much overlap. But in the past two months, the public feuding I’ve seen both during legislative hearings and online has been more dramatic than anything I’m expecting from the “Vanderpump Rules” recasting.

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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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Will an ‘increasingly litigious environment’ in Delaware drive incorporation out of state?

Delaware Business Court Insider

February has seen the start of another wave of discussion about Delaware’s place in the corporate law world, with the release of a Supreme Court decision, talk of large corporations redomesticating and commentary from Delaware’s new governor all coinciding.

Rumors of Meta potentially leaving Delaware for Texas surfaced on Jan. 31. The same day, Dropbox released a statement indicating plans to reincorporate in Nevada, claiming Nevada’s strategy of codifying corporate law is more predictable than Delaware law’s tendency to be shaped by litigation.

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Shareholder democracy? The chatter Elon Musk’s Tesla pay case Is spurring between lawyers and clients

Litigation Daily

I left for a week-long vacation in the summer of 2022, not knowing I was in my final days before a disproportionately large part of my beat would be taken over by a certain chronically online billionaire.

Two days into that vacation, the social media company formerly known as Twitter sued Elon Musk. Maybe someday there will again be a year in which Musk is not at the center of a major case pending in the Delaware courts, but 2025 is not that year.

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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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The ‘next battleground’ in Chapter 11: Third Circuit set to weigh opt-out releases

Delaware Business Court Insider

In the months leading up to argument over the Boy Scouts of America’s reorganization plan before the Third Circuit, questions about third-party releases in bankruptcy have been addressed by a handful of other courts.

While it’s not the only issue in play on appeal, those opposed to the confirmed Chapter 11 plan that’s been effective since April 2023—specifically, a subset of sexual abuse accusets whose compensation is a key part of the plan and a group of Boy Scout insurers—have spent years challenging the opt-out third-party releases that were part of a global settlement within the plan, confirmed by Delaware Bankruptcy Court Judge Laurie Selber Silverstein and upheld by U.S District Court Judge Richard G. Andrews.

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