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Delaware Corporate Law Bulletins Category

Delaware Court Rejects Claim that Directors Acted in Bad Faith By Selling Company Facing Activist Threat

Feb. 7, 2018—Delaware Court Rejects Claim that Directors Acted in Bad Faith By Selling Company Facing Activist Threat ABSTRACT Reaffirms high bar for proving that directors acted in conscious disregard of their obligations AUTHORS Robert S. Reder Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a consulting attorney at Milbank,...

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Delaware Court Refuses to Dismiss Common Stockholder’s Challenge to Redemption of Preferred Stock Owned by Controlling Stockholder

Sep. 18, 2017—Delaware-Court-Refuses-to-Dismiss-Common-Stockholders-Challenge-to-Redemption-of-Preferred-Stock-Owned-by-Controlling-Stockholder1 ABSTRACT Fiduciary standard of conduct requires board to maximize long-term value of common stock when exercising discretion in connection with contract rights of preferred stockholders AUTHOR Robert S. Reder Robert S. Reder, Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a consulting attorney at Milbank, Tweed, Hadley...

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Delaware Court Enjoins Stockholder Vote Pending Corrective Disclosures

Aug. 31, 2017—Delaware Court Enjoins Stockholder Vote Pending Corrective Disclosures ABSTRACT Requires a “complete picture of the facts in one place” before allowing acquiring company stockholder meeting to proceed AUTHOR Robert S. Reder Robert S. Reder, Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a consulting attorney at Milbank, Tweed,...

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Delaware Court Grants Pleading-Stage Dismissal of Litigation Challenging Control Stockholder-Led Buyout

Aug. 31, 2017—Delaware Court Grants Pleading-Stage Dismissal of Litigation Challenging Control Stockholder-Led Buyout ABSTRACT Because buyout followed “M&F Framework,” court not troubled by existence of higher third-party offer that was rejected by control stockholders AUTHOR Robert S. Reder Robert S. Reder, Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a...

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Delaware Chancellor Again Invokes Corwin in Granting Directors’ Motion to Dismiss Breach of Fiduciary Duty Claim

Aug. 31, 2017—Delaware-Chancellor-Again-Invokes-Corwin-In-Granting-Directors-Motion-to-Dismiss1 ABSTRACT Discusses potential application of Corwin in the context of allegedly unreasonable deal protections included in merger agreement AUTHOR Robert S. Reder Robert S. Reder, Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a consulting attorney at Milbank, Tweed, Hadley & McCloy LLP in New York City...

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Delaware Court Refuses to Invoke Corwin to “Cleanse” Alleged Director Misconduct Despite Stockholder Vote Approving Merger

Aug. 31, 2017—Delaware Court Refuses to Invoke Corwin to Cleanse Alleged Director Misconduct ABSTRACT Alleged material omissions in disclosures to stockholders lead court to deny defendant directors’ motion to dismiss; also addresses meaning of “coercion” in Corwin context AUTHOR Robert S. Reder Robert S. Reder, Professor of the Practice of Law at Vanderbilt University Law School, has...

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Delaware Courts Confront Question Whether “Cleansing Effect” of Corwin Applies to Duty of Loyalty Claims

May. 9, 2017—Delaware Courts Confront Question ABSTRACT Recent rulings settle apparent divergence between Comstock and Larkin decisions and narrow exception to application of Corwin to cases where controlling stockholder extracts personal benefits in a merger transaction AUTHORS Robert S. Reder Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a consulting...

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Doubling Down on “Plain Language”: Delaware Court Extends In re VAALCO Energy by Invalidating Supermajority Vote Requirement for Director Removal

May. 4, 2017—Doubling Down on Plain Language Delaware Court Extends ABSTRACT Court finds that plain language of DGCL §141(k) unequivocally requires only a simple stockholder majority to remove members of an unclassified board of directors AUTHORS Robert S. Reder Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a consulting attorney...

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Dell Appraisal Proceeding: Delaware Court of Chancery Finds Price Payable in Management Buyout Understates “Fair Value” by 28%

Feb. 27, 2017—Dell Appraisal Proceeding Delaware Court of Chancery Finds Price Payable in Management Buyout Understates “Fair Value” by 28% ABSTRACT Vice Chancellor Laster declines to give weight to transaction price negotiated by independent board committee and approved by unaffiliated stockholders AUTHORS Robert S. Reder Professor of the Practice of Law at Vanderbilt University Law School, has...

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Delaware Courts Diverge on Whether “Cleansing Effect” of Corwin Applies to Duty of Loyalty Claims

Jan. 13, 2017—Delaware Courts Diverge on Whether “Cleansing Effect” of Corwin Applies to Duty of Loyalty Claims ABSTRACT Comstock requires a finding that entire fairness review is inapplicable before Corwin triggers business judgment deference. Larkin applies Corwin’s “cleansing effect” to all transactions absent a controlling stockholder. AUTHORS Robert S. Reder Professor of the Practice of Law at...

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Delaware Chancery Disqualifies Lead Petitioners in Dell Appraisal Who Inadvertently Voted “FOR” Management Buyout

Nov. 11, 2016—Delaware Chancery Disqualifies Lead Petitioners in Dell Appraisal Who Inadvertently Voted “FOR” Management Buyout ABSTRACT Delaware Chancery Disqualifies Lead Petitioners in Dell Appraisal Who Inadvertently Voted “FOR” Management Buyout AUTHORS Robert S. Reder Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a consulting attorney at Milbank, Tweed, Hadley...

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Delaware Court Enjoins “Board Reduction Plan” Aimed at Undermining Threatened Proxy Contest

Oct. 7, 2016—Delaware Court Enjoins “Board Reduction Plan” Aimed at Undermining Threatened Proxy Contest ABSTRACT Explains that enhanced scrutiny, requiring a compelling justification for electoral manipulations, is the appropriate judicial standard of review. AUTHORS Robert S. Reder Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a consulting attorney at Milbank,...

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Delaware Court Dismisses Duty of Loyalty Claim Against Disinterested, Independent Directors

Sep. 16, 2016—Delaware Court Dismisses Duty of Loyalty Claim Against Disinterested, Independent Directors ABSTRACT Informed Board’s decision to disregard “speculative” valuation methods when recommending a company sale not so egregious as to constitute bad faith. AUTHORS Robert S. Reder Professor of the Practice of Law at Vanderbilt University Law School, has been serving as a consulting attorney...

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Delaware Chancery Court Extends “Cleansing Effect” of Stockholder Approval Under KKR to Two-Step Acquisition Structure

Jul. 21, 2016—Delaware Chancery Court Extends “Cleansing Effect” of Stockholder Approval Under KKR to Two-Step Acquisition Structure ABSTRACT Court finds stockholder tender of majority shares in first step of DGCL §251(h) merger equivalent to stockholder vote in one-step merger. Dismisses breach of fiduciary duty claim against target board and related aiding and abetting claim against its financial...

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Delaware Supreme Court Clarifies “Cleansing Effect” of Fully-Informed Stockholder Vote

Jul. 13, 2016—Delaware Supreme Court Clarifies “Cleansing Effect” of Fully-Informed Stockholder Vote ABSTRACT Court also explains that: (i) Good faith reliance by corporate directors does not absolve M&A advisors from potential aiding and abetting liability; and (ii) Scienter is the standard for establishing aiding and abetting liability. AUTHOR Robert S. Reder Professor of the Practice of Law...

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Delaware Court Addresses Entrenchment Claims Brought Against Directors Under Activist Hedge Fund Attack

Jun. 19, 2016—Delware Court Addressess Entrenchment Claims Brought Against Directors Under Activist Hedge Fund Attack ABSTRACT Chancery Court finds terms of settlement with hedge fund not subject to Unocal enhanced scrutiny review. But refuses to dismiss fiduciary claims arising from defensive bylaw amendments adopted post-settlement. AUTHOR Robert S. Reder Professor of the Practice of Law at Vanderbilt...

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