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.


Beware “Lite” Reasoning: Delaware Vice Chancellor Refuses to Disturb Arbitration Ruling Despite Concerns About Flawed Reasoning and Outcome

A recent Delaware Court of Chancery decision offers an important lesson on the limits of court review of an arbitration award, particularly when parties forego a fully reasoned award. Even though Vice Chancellor Glasscock found that “[t]he arbitration proceeding and the resulting award [were] flawed,” the court refused to overturn the award that appeared to find a contractual nonparty jointly and severally liable for breaches of the representations and warranties in a purchase agreement. The risk parties sometimes take when they contract for arbitration, the court found, is “receiving an arbitral decision that is questionable under the law and facts, but that is nonetheless—not coming within the narrow window of judicial oversight—not reviewable.”


Entire Fairness Does Not Require Perfection

The Delaware Supreme Court recently held in In re Tesla Motors Stockholders’ Litigation, ___ A.3d ___, 2023 WL 3854008 (Del. Jun. 6, 2023) (“Tesla”), that an entire fairness analysis does not require perfection, so long as the acquisition itself was the result of fair dealing and fair price. Practitioners and boards engaging with a potentially conflicted transaction would be well served to study this opinion with care, particularly where the potential acquiror cannot (or chooses not to) employ a special committee of independent directors to handle negotiations.


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.


The Culture Wars Come For Section 220

On June 27, 2023, in Simeone v. The Walt Disney Company (Del. Ch. June 27, 2023), the Delaware Court of Chancery rejected a lawsuit by a Walt Disney Company’s stockholder to compel inspection of its books and records relating to the company’s opposition to Florida House Bill 1557. Though this case was in some ways quite routine—it rested on a straightforward application of the long-settled standard for a Section 220 demand—the political subtext underlying the inspection demand was anything but ordinary.


Caesar’s Wife: How a Single-Member Special Litigation Committee Can Avoid Reproach

The Delaware Court of Chancery recently granted a motion by a single-member special litigation committee to terminate a stockholder derivative suit.  In a 77-page opinion, Vice Chancellor Lori W. Will found that the one-member special litigation committee conducted a good faith investigation and reached reasonable conclusions regarding the transactions at issue.  The opinion demonstrates that the court’s oversight of a single-member special litigation committee will be rigorous, and it offers valuable practice points for future single-member committees.


The Board as Activist

The universal proxy rules, which went into effect on September 1, 2022, have shifted the landscape of shareholder activism by allowing shareholders to “mix and match” their votes across proxy cards in contested elections. Since September, the move to candidate-based (rather than slate-based) voting has encouraged activists to nominate smaller, more targeted slates, and the added leverage in settlement negotiations has ultimately resulted in activists winning a larger number of board seats.

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Meet the Team

<a target=‘_blank’ href="">Andrew W. Stern</a>

Andrew W. Stern

New York
<a target=‘_blank’ href="">Charlotte K. Newell</a>

Charlotte K. Newell

New York
<a target=‘_blank’ href="">Elizabeth Y. Austin</a>

Elizabeth Y. Austin

<a target=‘_blank’ href="">Jaime A. Bartlett</a>

Jaime A. Bartlett

San Francisco
<a target=‘_blank’ href="">Matthew J. Dolan</a>

Matthew J. Dolan

Palo Alto
<a target=‘_blank’ href="">Jim Ducayet</a>

Jim Ducayet

<a target=‘_blank’ href="">Yolanda C. Garcia</a>

Yolanda C. Garcia

<a target=‘_blank’ href="">James Heyworth</a>

James Heyworth

New York
<a target=‘_blank’ href="">Alex J. Kaplan</a>

Alex J. Kaplan

New York
<a target=‘_blank’ href="">Jon Muenz</a>

Jon Muenz

New York
<a target=‘_blank’ href="">Ian M. Ross</a>

Ian M. Ross


<a target=‘_blank’ href="">Hille R. Sheppard</a>

Hille R. Sheppard

<a target=‘_blank’ href="">Heather Benzmiller Sultanian</a>

Heather Benzmiller Sultanian

<a target=‘_blank’ href="">Robert S. Velevis</a>

Robert S. Velevis



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