AI and the Role of the Board of Directors

Artificial intelligence (AI) has the capacity to disrupt entire industries, with implications for corporate strategy and risk, stakeholder relationships, and compliance that require the attention of the board of directors.

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Can ChatGPT Do Our Jobs Better Than Us? Not Yet.

Artificial intelligence and its impact on the practice of law is in the news again. Readers likely have heard about the attorneys that used ChatGPT, an artificial chatbot that synthesizes high volumes of data, to draft a legal brief that they submitted in a civil action in the U.S. District Court for the Southern District of New York. Unfortunately for these practitioners, ChatGPT cited multiple cases that did not exist, and the attorneys recently endured a sanctions hearing before the presiding district judge.

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Future-Proofing the Board of Directors

To help navigate increasingly complex corporate governance challenges, a recent report by the National Association of Corporate Directors (NACD) Commission on The Future of the American Board highlights areas of focus for boards in 2023 and beyond.

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Charlotte Newell Participates in PLI’s “Delaware Law Developments 2023: What All Business Lawyers Need To Know”

On May 1, 2023, Sidley partner Charlotte Newell participated in “Delaware Law Developments 2023: What All Business Lawyers Need to Know,” a program presented by the Practising Law Institute.  The annual program provides updates on Delaware law matters, offering insights from leading Delaware corporate law practitioners and jurists.

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Caveat Emptor Still Rules The Day For MLPs

Just as a $700 million damages award and its accompanying sharp criticism of legal opinions garner headlines, so does reversal of that ruling.  The Delaware Supreme Court closed out 2022 with its decision in Boardwalk Pipeline Partners, LP v. Bandera Master Funds LP, reversing the Court of Chancery’s sizeable post-trial award on narrow contractual grounds.  The reversal is a substantial victory for the defendants.  But for non-parties, of note was the Delaware Supreme Court’s decision to leave intact the trial court’s conclusions regarding law firm opinions.  Taken together, both courts’ rulings offer meaningful guidance for parties and counsel negotiating complex transactions and considering inclusion of opinion of counsel conditions (or, attempting to satisfy such conditions in existing contracts).

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How To Draft Fee-Shifting Provisions in Indemnification Clauses

Delaware courts have determined that even quite broad language referencing attorneys’ fees may not be explicit enough to shift fees in first-party litigation.

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The Role of Mutual Fund Directors

Tune into Mutual Fund Minute here, as Jay Baris, a partner in Sidley’s Investment Funds group, takes a nostalgic look at the long and winding regulatory road of fund board culture, with a reminder that history is always an important guide to understanding the present.

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You Might Think Your Arbitration Is Confidential…But, In Delaware, The Court Will Decide

Practitioners rely on ostensibly ironclad provisions of protective orders to withhold documents or portions thereof from public view. And that is particularly so in arbitrations, which are generally private proceedings.  But a recent Delaware Court of Chancery opinion issued by Vice Chancellor Paul A. Fioravanti, Jr. serves as a reminder that practitioners should be mindful that rules of the court regarding confidentiality may differ from arbitration rules or even stipulated confidentiality agreements among arbitration parties.

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Delaware Supreme Court Confirms That “and” Is a Word of Many Meanings

Last year we explained how a word as common as the conjunction “and” could be subject to different interpretations in a contract. See Grammarian’s Delight: It Depends On What The Meaning Of ‘And’ Is. The Delaware Supreme Court recently affirmed Vice-Chancellor Glasscock’s construction of the word “and” given the “range of possible interpretations” that courts have endorsed for the word—a good reminder for parties to exercise care when drafting agreements.

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Court of Chancery Dismisses Director Oversight Claims Related to Mission Critical Risk

In a March 1, 2023 opinion (In re McDonald’s Corp. Stockholder Derivative Litig., C.A. No. 2021-0324-JTL), the Delaware Court of Chancery dismissed duty of oversight claims against director defendants and provided helpful guidance on “mission critical” risks, the “gross negligence” standard under the business judgment rule, and redactions in productions of books and records under DGCL Section 220, including the potential that a motion to dismiss relying on overly redacted documents from a 220 production could be converted to a motion for summary judgment by the court. The court also entered an order on the same day, granting the defendants’ Rule 23.1 motion and dismissing the action in its entirety, including claims against the company’s former Global Chief People Officer. The court had previously denied a motion to dismiss those claims under Rule 12(b)(6) on January 25, 2023, as discussed further here, underscoring the important role of Rule 23.1 in derivative cases.

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