The Delaware Court of Chancery rang in the new year with a decision calling into question certain provisions in a company’s advance notice bylaws, which had been adopted in the face of an upcoming proxy fight. On the whole, the Kellner v. AIM Immunotech Inc. decision is yet another reminder of the critical importance of advance notice bylaws and that they are often enforced by Delaware courts. But companies should work with counsel to consider the impact of this decision on their own bylaws, bearing in mind that considerations may change based on the outcome of a now-pending appeal in Kellner.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Charlotte K. Newellhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngCharlotte K. Newell2024-01-18 10:07:262024-01-18 10:15:34New Year’s Surprise: Portions of Cloudy Day Advance Notice Bylaw Amendments Called into Question
Last month, Vice Chancellor Glasscock dismissed shareholder claims in Teamsters Local 443 Health Services & Insurance Plan v. John C. Chou (Del. Ch. Nov. 17, 2023) (“Teamsters II”) after finding that a single-member special litigation committee (“SLC”) had sufficiently investigated the stockholder’s allegations before recommending dismissal. Vice Chancellor Glasscock’s decision is not the first time that the Court of Chancery approved a single-member SLC’s motion to dismiss a derivative suit. For example, in April 2023, Vice Chancellor Lori W. Will granted a single-member SLC’s motion to terminate a shareholder action In re Baker Hughes Derivative Litig., 2023 WL 2967780 (Del. Ch. Apr. 17, 2023).
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2023/09/MN-18360_Updated-Enhanced-Scrutiny-Blog-imagery_833x606_17.jpg606833Ian M. Rosshttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngIan M. Ross2024-01-10 10:27:132024-03-13 17:18:36Don’t Go It Alone? Or Do. Delaware Chancery Court Rules That A Single-Member Special Litigation Committee’s Recommendation Passes Muster
When an M&A deal closes, is it done? Not always. More and more disputes are arising after closing, which results in lost time and expense for both buyers and sellers as they realize they don’t actually have a done deal. Not all disputes after closing can be avoided, but their effects can be minimized with the right due diligence, transparency in the process, and knowing the mechanisms for resolving them efficiently.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Samir A. Gandhihttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngSamir A. Gandhi2024-01-09 10:06:002024-01-09 10:07:00Is Your M&A Contract Vulnerable to Post-Closing Litigation? We Break it Down
In a significant decision the week before the Christmas holiday, the Delaware Supreme Court, sitting en banc, reversed the Delaware Court of Chancery’s dismissal of Lebanon County Employees’ Retirement Fund v. Collis et al. (“Lebanon”), reinstating stockholder derivative claims against the directors of AmerisourceBergen Corporation arising out of the Company’s wholesale distribution of prescription opioids in the United States. Interested readers can view our blog’s prior discussion of the Court of Chancery’s dismissal here.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Vincent J. Margiottahttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngVincent J. Margiotta2024-01-04 09:05:352024-01-03 16:10:14A Judicial Notice That Judicial Notice Has Its Limits
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2023/12/MN-18360_Updated-Enhanced-Scrutiny-Blog-imagery_833x606_5.jpg606833Elizabeth Y. Austinhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngElizabeth Y. Austin2023-12-26 10:12:542024-02-06 12:55:57Unfettered Does Not Mean Unlimited: Two New Delaware Decisions Shed Light on the Limitations of Inspection Rights
Sidley is pleased to share the December 2023 issue of Sidley Perspectives on M&A and Corporate Governance, a quarterly newsletter designed to keep you current on what we consider to be the most important legal developments involving M&A and corporate governance matters.
Rapid rulemaking and aggressive enforcement by the Securities and Exchange Commission (SEC), combined with legislative, judicial, and regulatory developments, have created new requirements and expectations for U.S. public companies. As we approach year end, such companies might consider taking the following actions in 2024: (more…)
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Sonia Gupta Barroshttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngSonia Gupta Barros2023-12-14 09:00:172023-12-14 09:13:39Action Items for U.S. Public Companies to Consider for 2024
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New Year’s Surprise: Portions of Cloudy Day Advance Notice Bylaw Amendments Called into Question
The Delaware Court of Chancery rang in the new year with a decision calling into question certain provisions in a company’s advance notice bylaws, which had been adopted in the face of an upcoming proxy fight. On the whole, the Kellner v. AIM Immunotech Inc. decision is yet another reminder of the critical importance of advance notice bylaws and that they are often enforced by Delaware courts. But companies should work with counsel to consider the impact of this decision on their own bylaws, bearing in mind that considerations may change based on the outcome of a now-pending appeal in Kellner.
(more…)
Charlotte K. Newell
New York
cnewell@sidley.com
Maya S. Shair
Associate
mshair@sidley.com
Loren Braswell
Don’t Go It Alone? Or Do. Delaware Chancery Court Rules That A Single-Member Special Litigation Committee’s Recommendation Passes Muster
Last month, Vice Chancellor Glasscock dismissed shareholder claims in Teamsters Local 443 Health Services & Insurance Plan v. John C. Chou (Del. Ch. Nov. 17, 2023) (“Teamsters II”) after finding that a single-member special litigation committee (“SLC”) had sufficiently investigated the stockholder’s allegations before recommending dismissal. Vice Chancellor Glasscock’s decision is not the first time that the Court of Chancery approved a single-member SLC’s motion to dismiss a derivative suit. For example, in April 2023, Vice Chancellor Lori W. Will granted a single-member SLC’s motion to terminate a shareholder action In re Baker Hughes Derivative Litig., 2023 WL 2967780 (Del. Ch. Apr. 17, 2023).
(more…)
Ian M. Ross
Miami
iross@sidley.com
Eric Gordon
Is Your M&A Contract Vulnerable to Post-Closing Litigation? We Break it Down
When an M&A deal closes, is it done? Not always. More and more disputes are arising after closing, which results in lost time and expense for both buyers and sellers as they realize they don’t actually have a done deal. Not all disputes after closing can be avoided, but their effects can be minimized with the right due diligence, transparency in the process, and knowing the mechanisms for resolving them efficiently.
(more…)
Samir A. Gandhi
New York
sgandhi@sidley.com
Robert S. Velevis
Dallas
rvelevis@sidley.com
Frank J. Favia, Jr.
Alexis Cooper
Chicago
acooper@sidley.com
A Judicial Notice That Judicial Notice Has Its Limits
In a significant decision the week before the Christmas holiday, the Delaware Supreme Court, sitting en banc, reversed the Delaware Court of Chancery’s dismissal of Lebanon County Employees’ Retirement Fund v. Collis et al. (“Lebanon”), reinstating stockholder derivative claims against the directors of AmerisourceBergen Corporation arising out of the Company’s wholesale distribution of prescription opioids in the United States. Interested readers can view our blog’s prior discussion of the Court of Chancery’s dismissal here.
(more…)
Vincent J. Margiotta
New York
vmargiotta@sidley.com
Andrew W. Stern
New York
astern@sidley.com
Unfettered Does Not Mean Unlimited: Two New Delaware Decisions Shed Light on the Limitations of Inspection Rights
As this blog has highlighted, a number of judicial decisions on statutory demands to inspect books and records under Delaware’s Section 220 in recent years have emphasized the broad scope of types of materials to which courts will permit access, and the consequences faced by companies that have attempted to restrict access. Two recent Delaware Court of Chancery decisions provide a welcome reminder of the limitations on the scope of the inspection right. These cases are Jose Mellado, D.M.D. v. ACPDO Parent Inc. and Greenlight Capital Offshore Partners, LTD. v. Brighthouse Financial, Inc.
(more…)
Elizabeth Y. Austin
Chicago
laustin@sidley.com
Rachel A. Rein
Sidley Perspectives on M&A and Corporate Governance
Sidley is pleased to share the December 2023 issue of Sidley Perspectives on M&A and Corporate Governance, a quarterly newsletter designed to keep you current on what we consider to be the most important legal developments involving M&A and corporate governance matters.
(more…)
Enhanced Scrutiny Contributors
delawarelit@sidley.com
Action Items for U.S. Public Companies to Consider for 2024
Rapid rulemaking and aggressive enforcement by the Securities and Exchange Commission (SEC), combined with legislative, judicial, and regulatory developments, have created new requirements and expectations for U.S. public companies. As we approach year end, such companies might consider taking the following actions in 2024: (more…)
Sonia Gupta Barros
Washington, D.C.
sbarros@sidley.com
Beth E. Berg
Chicago
bberg@sidley.com
Paul L. Choi
Chicago
pchoi@sidley.com
Samir A. Gandhi
New York
sgandhi@sidley.com
John P. Kelsh
Chicago
jkelsh@sidley.com
Claire H. Holland
Chicago
cholland@sidley.com
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astern@sidley.com
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Jim Ducayet
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ygarcia@sidley.com
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Alex J. Kaplan
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Jodi E. Lopez
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