In 2016, the Delaware Court of Chancery held in In re Trulia Inc. Stockholder Litigation that what it called “disclosure settlements”—settlements in which a class of stockholders solely received supplemental proxy disclosures in exchange for a classwide release of claims—“would be met with continued disfavor unless the supplemental disclosures address a plainly material misrepresentation or…

Directors and officers of Delaware corporations often benefit from a robust suite of liability protections that generally include exculpation rights, indemnification rights, rights to recoup expenses incurred while defending a proceeding in advance of its final disposition (or “advancement” rights), and rights under director and officer (D&O) liability insurance policies. While each aspect of this so-called…

In early 2023, the Delaware Court of Chancery was inundated with petitions under Section 205 of the DGCL filed by former SPACs seeking to have their capital structures validated after the Court.  The petitions followed a ruling granting a fee award in Garfield v. Boxed, Inc., in which the Court found a challenge to the…

On August 15, 2024, Delaware Governor Carney signed Senate Substitute No. 1 to Senate Bill No 266 adopting limitations on actions brought under the Delaware False Claims and Reporting Act (6 Del. C. § 1201 et seq.) to the extent that they relate to unclaimed property filing obligations.  In general, under the Delaware False Claims…

A Q&A guide to state law on independent contractor status for private employers in Delaware. This Q&A addresses how independent contractors are classified under state law, including the various tests to evaluate worker status, penalties for misclassification, and practices to avoid misclassification. Federal, local, or municipal law may impose additional or different requirements.…

In Campus Eye Management Holdings, LLC v. E. Bruce DiDonato, OD, C.A. 2024-0121-LWW (Del. Ch. August 30, 2024), the Delaware Court of Chancery held that an amendment to a limited liability company agreement (an “LLC Agreement”) that was adopted by merger was valid and enforceable, notwithstanding that a different vote that was not attainable under the…

Signed by Delaware Governor Carney on August 15, 2024, Senate Bill 267 made numerous technical amendments to the Delaware unclaimed property statute (12 Del. C. § 1130 et seq.) as follows: Foreign Addressed Property.  In the case of dormant foreign addressed property held by a Delaware formed entity, Delaware has historically claimed priority to escheat…

On July 17, 2024, the Governor of the State of Delaware signed legislation enacting several significant changes to the Delaware General Corporation Law (DGCL). The 2024 amendments became effective on August 1, 2024, and apply to all contracts made by a corporation, all agreements, instruments or documents approved by the board of directors, and all agreements…

This week the Delaware Department of Labor (“DDOL”), Paid Leave Division, provided eligible employers who want to self-insure with plan templates (“aka” handbook policy) to use when developing their internal plans to provide paid leave benefits in compliance with the Healthy Delaware Families Act (“the Act”).  It is not mandatory to use a template, but using…

In 2014, the Delaware Supreme Court held in Kahn v. M&F Worldwide (MFW) that the business judgment rule applies to a transaction that would otherwise be subject to the exacting entire fairness standard of review due to the presence of a conflicted controlling stockholder so long as the parties condition the transaction at the outset…