Rapid rulemaking and aggressive enforcement by the SEC, combined with legislative, judicial, and regulatory developments, have created new requirements and expectations for U.S. public companies.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2023/09/MN-18360_Updated-Enhanced-Scrutiny-Blog-imagery_833x606_29.jpg606833Sonia Gupta Barroshttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngSonia Gupta Barros2025-02-04 09:05:472025-02-03 16:08:11Action Items for U.S. Public Companies for 2025
In 2022, the Defendants in Manti Holdings, LLC v. The Carlyle Group Inc. lost a battle—the Delaware Court of Chancery denied their motion to dismiss claims of breaches of fiduciary duties in connection with the 2017 sale of Authentix Acquisition Company, which had been majority-owned by affiliates of a private equity firm. Earlier this month, following a week-long trial, they won the war when the court ruled for them on the remaining claims in the case.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Philip H. DeVoehttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngPhilip H. DeVoe2025-01-28 09:44:092025-01-28 09:44:09It Took Seven Years But PE Firm Proves No Conflict In Sale Transaction
Recent legislation in Delaware has eased the path of boards of directors who want to increase the number of a corporation’s authorized shares. In Salama, the Court of Chancery concluded that the General Assembly’s most recent effort in this area, made in 2023, has yielded an ambiguous statute. Salama v. Simon, No. 2024-1124-JTL, 2024 WL 4906737 (Del. Ch. Nov. 27, 2024). The court then resolved that ambiguity in favor of boards and against stockholders opposing share increases.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2024/10/MN-24015-Enhanced-Scrutiny-Blog-Imagery-Refresh_14.jpg606833Robin E. Wechkinhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngRobin E. Wechkin2025-01-23 09:03:582025-01-22 16:31:58Court of Chancery Resolves Statutory Ambiguity in Favor of Boards Seeking to Increase a Corporation’s Number of Authorized Shares
On October 1, 2024, in In re TransUnion Derivative Stockholder Litigation, Vice Chancellor Will in the Delaware Court of Chancery dismissed a derivative suit against the Directors of TransUnion for allegedly breaching their fiduciary duty of oversight in relation to agreements made pursuant to a Consumer Financial Protection Bureau (“CFPB”) consent order. The Court concluded that Plaintiffs failed to establish a breach under both theories presented, one under Caremark and one under In re Massey Energy, because while the TransUnion Directors may have conducted their oversight duty imperfectly, they did so with a good faith effort.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Alexandra Bielerhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngAlexandra Bieler2025-01-14 09:03:102025-01-14 09:37:12Chancery Rejects ‘Quibbles’ As The Basis For Caremark Claims, Underscoring The Wide ‘Gulph’ Between Imperfect Compliance and Purposeful Lawbreaking
In 2024, Enhanced Scrutiny provided in-depth and practical insights related to M&A and corporate governance decisions and developments from the Delaware courts and other jurisdictions. Read the most popular posts from the past year below. We look forward to continuing our coverage in 2025.
Earlier this year, in Cantor Fitzgerald v. Ainslie, the Delaware Supreme Court reiterated that “[t]he courts of this State hold freedom of contract in high—some might say, reverential—regard” in interpreting alternative entity agreements. A recent case, Mehra v. Teller, starkly illustrates the court’s strict enforcement of unambiguous contract language. After a full trial, Chancellor Kathaleen McCormick upheld an LLC agreement’s plain language despite a conflict with the extrinsic evidence of the parties’ true intent presented at trial.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Yifei Wanghttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngYifei Wang2024-12-18 09:04:092024-12-16 13:42:54Unambiguous Language Prevails Over Evidence Of The Parties’ Intent—After Full Trial
The doctrine of laches and statutes of limitations both bar claims brought too late. But when does each apply? And how late is too late? A recent case in the Delaware Court of Chancery, MW Gestion v. Sinovac Biotech Ltd., provides insight.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2024/11/MN-24015-Enhanced-Scrutiny-Blog-Imagery-Refresh_2.jpg606833Hille R. Sheppardhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngHille R. Sheppard2024-12-04 09:03:122024-12-04 09:41:24Time Flies: Understanding The Court of Chancery’s Approach To Laches and Statutes of Limitations
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Action Items for U.S. Public Companies for 2025
Rapid rulemaking and aggressive enforcement by the SEC, combined with legislative, judicial, and regulatory developments, have created new requirements and expectations for U.S. public companies.
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
It Took Seven Years But PE Firm Proves No Conflict In Sale Transaction
In 2022, the Defendants in Manti Holdings, LLC v. The Carlyle Group Inc. lost a battle—the Delaware Court of Chancery denied their motion to dismiss claims of breaches of fiduciary duties in connection with the 2017 sale of Authentix Acquisition Company, which had been majority-owned by affiliates of a private equity firm. Earlier this month, following a week-long trial, they won the war when the court ruled for them on the remaining claims in the case.
(more…)
Philip H. DeVoe
New York
philip.devoe@sidley.com
Andrew W. Stern
New York
astern@sidley.com
Court of Chancery Resolves Statutory Ambiguity in Favor of Boards Seeking to Increase a Corporation’s Number of Authorized Shares
Recent legislation in Delaware has eased the path of boards of directors who want to increase the number of a corporation’s authorized shares. In Salama, the Court of Chancery concluded that the General Assembly’s most recent effort in this area, made in 2023, has yielded an ambiguous statute. Salama v. Simon, No. 2024-1124-JTL, 2024 WL 4906737 (Del. Ch. Nov. 27, 2024). The court then resolved that ambiguity in favor of boards and against stockholders opposing share increases.
(more…)
Robin E. Wechkin
Seattle
rwechkin@sidley.com
Chancery Rejects ‘Quibbles’ As The Basis For Caremark Claims, Underscoring The Wide ‘Gulph’ Between Imperfect Compliance and Purposeful Lawbreaking
On October 1, 2024, in In re TransUnion Derivative Stockholder Litigation, Vice Chancellor Will in the Delaware Court of Chancery dismissed a derivative suit against the Directors of TransUnion for allegedly breaching their fiduciary duty of oversight in relation to agreements made pursuant to a Consumer Financial Protection Bureau (“CFPB”) consent order. The Court concluded that Plaintiffs failed to establish a breach under both theories presented, one under Caremark and one under In re Massey Energy, because while the TransUnion Directors may have conducted their oversight duty imperfectly, they did so with a good faith effort.
(more…)
Alexandra Bieler
New York
abieler@sidley.com
Jim Ducayet
Chicago
jducayet@sidley.com
Top 15 Posts of 2024
In 2024, Enhanced Scrutiny provided in-depth and practical insights related to M&A and corporate governance decisions and developments from the Delaware courts and other jurisdictions. Read the most popular posts from the past year below. We look forward to continuing our coverage in 2025.
(more…)
Enhanced Scrutiny Contributors
delawarelit@sidley.com
Unambiguous Language Prevails Over Evidence Of The Parties’ Intent—After Full Trial
Earlier this year, in Cantor Fitzgerald v. Ainslie, the Delaware Supreme Court reiterated that “[t]he courts of this State hold freedom of contract in high—some might say, reverential—regard” in interpreting alternative entity agreements. A recent case, Mehra v. Teller, starkly illustrates the court’s strict enforcement of unambiguous contract language. After a full trial, Chancellor Kathaleen McCormick upheld an LLC agreement’s plain language despite a conflict with the extrinsic evidence of the parties’ true intent presented at trial.
(more…)
Yifei Wang
Chicago
yifei.wang@sidley.com
Jarrett H. Gross
Elizabeth Y. Austin
Chicago
laustin@sidley.com
Time Flies: Understanding The Court of Chancery’s Approach To Laches and Statutes of Limitations
The doctrine of laches and statutes of limitations both bar claims brought too late. But when does each apply? And how late is too late? A recent case in the Delaware Court of Chancery, MW Gestion v. Sinovac Biotech Ltd., provides insight.
(more…)
Hille R. Sheppard
Chicago
hsheppard@sidley.com
Daniel Epstein
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Andrew W. Stern
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