Significant Proposed Amendments to the General Corporation Law of the State of Delaware in 2013: Ratification, Second-Step Mergers, Public Benefit Corporations and Other Matters
Legislation proposing to amend the General Corporation Law of the State of Delaware (the “DGCL”) and related sections of title 8 of the Delaware Code has been submitted to the Corporation Law Section of the Delaware State Bar Association for approval. If the amendments become effective, they would result in several significant changes to the DGCL.
Potential Environmental Legislative Amendments that Will Affect Future Site Development in the State and Facilities under the State’s HSCA, Tanks and Oil Pollution Programs
The State of Delaware Department of Natural Resources and Environmental Control is considering several legislative amendments that are of potential significance for future site development in the State, as well as for facilities that fall under DNREC's Hazardous Substance Cleanup, Tanks and Oil Pollution programs.
Meso Scale Diagnostics, LLC, v. Roche Diagnostics GMBH: Reverse Triangular Merger Did Not Result in an Assignment by Operation of Law
In Meso Scale Diagnostics, LLC v. Roche Diagnostics GMBH, Vice Chancellor Parsons of the Court of Chancery, ruling on a motion for summary judgment, held that a reverse triangular merger did not constitute an assignment by operation of law on the part of the surviving corporation.
Kallick v. SandRidge Energy, Inc.: Preliminary Injunction Issued for Board’s Failure to Approve Insurgent Slate for Purposes of Credit Agreement
In Kallick v. SandRidge Energy, Inc., Chancellor Strine of the Court of Chancery enjoined the board of directors of SandRidge Energy, Inc. from soliciting consent revocations in connection with the consent solicitation launched by a stockholder to install its own slate of directors on the Company’s board, until the incumbent board of the Company approves the members of the opposing slate for purposes of a change in control provision in the Company’s credit agreement.
Recent Delaware Corporate Law Updates
In recent months, Delaware courts have addressed a number of issues important to Delaware corporations and their advisors.
In re BJ’s Wholesale Club Shareholders Litigation: Court of Chancery Dismisses Claim That Directors Breached Revlon Duties
In In re BJ’s Wholesale Club Shareholders Litigation, Vice Chancellor Noble of the Court of Chancery dismissed claims that the board of directors of BJ’s Wholesale Club, Inc. breached its fiduciary duties in a going-private transaction by consciously disregarding its so-called Revlon duties, and that acquirors Leonard Green & Partners, L.P. and CVC Capital Partners aided and abetted those breaches.
Dent v. Ramtron: Disclosure of Management Projections Not Required Where Such Disclosure Would Be Merely Consistent With Other Information in Proxy Statement
In a bench ruling in Dent v. Ramtron International Corporation, Vice Chancellor Parsons of the Court of Chancery declined to preliminarily enjoin a stockholder vote on a proposed merger between Cypress Semiconductor Corporation and Ramtron International Corporation.
In re Novell, Inc. Shareholder Litigation: Allegations that Board Treated Bidders in Materially Different Manner Stated Claim that Board Acted in Bad Faith
In In re Novell, Inc. Shareholder Litigation, Vice Chancellor Noble of the Court of Chancery declined to dismiss breach of fiduciary duty claims against the board of directors of Novell, Inc., concluding that the plaintiffs’ allegations that the Board had treated a serious bidder in a materially different manner than Novell’s eventual acquiror supported a reasonable inference that the Board had acted in bad faith.
Metropolitan Life Insurance Company v. Tremont Group Holdings, Inc.: Plaintiff Did Not Transform Derivative Claims into Direct Claims by Opting Out of Federal Settlement
In Metropolitan Life Insurance Company v. Tremont Group Holdings, Inc., Vice Chancellor Parsons of the Court of Chancery further clarified Delaware law with respect to the distinction between direct and derivative claims in litigation involving Delaware limited partnerships.
South v. Baker: Court of Chancery Dismisses Caremark Claim with Prejudice to Named Plaintiffs Only
In South v. Baker, Vice Chancellor Laster of the Court of Chancery dismissed a derivative claim for breach of fiduciary duty based on the Caremark theory of liability, finding that because the plaintiffs failed adequately to represent the company, dismissal of their complaint would be with prejudice to the named plaintiffs only and would not preclude the litigation efforts of other stockholders.
