An extensive body of law has evolved regarding special committees, and Richards Layton has been at the forefront of this area of law from the start. Our lawyers are skilled in addressing the legal, strategic and practical issues that frequently arise in special committee matters, including the formation of committees, negotiation strategies, drafting of transaction documents, drafting of reports, and documenting the overall process. We work to mitigate the risks that special committees face and to ensure that committee members satisfy standards of director conduct. At the same time, we understand the practical considerations of collaborating, where appropriate, with company counsel and the committee’s financial advisors to successfully address all facets of complex matters. By understanding our clients’ goals and concerns, we help them achieve successful business results.
Transactional Committees
We are well versed in the fiduciary duties of directors and members of special committees, the role and involvement of special committees in connection with potential transactions and conflict of interest situations. Our numerous transactional committee representations include matters involving mergers, business combinations, acquisitions of assets, potential sale transactions, and recapitalization transactions. We advise special committees of directors on the complex Delaware corporate law issues and options presented by management buy-out and going-private transactions.
Investigative Committees
Richards Layton has frequently acted as counsel to special committees formed to investigate matters raised in stockholder demands and to recommend appropriate action to the board of directors. For example, we have represented committees of the boards of directors of major corporations formed to investigate those corporations’ historical stock option granting practices and to make recommendations regarding appropriate remedial measures.
Special Litigation Committees
Our firm has substantial experience representing special litigation committees formed to address matters involving stockholder derivative claims. Indeed, in 1981 we represented the special litigation committee in the seminal case of Zapata Corp. v. Maldonado, the first case to recognize the availability of the special litigation committee procedure under Delaware law. Since Zapata, we have acted extensively as counsel to special litigation committees, including those chartered to deal with derivative litigation involving corporations.
We Wrote the Book on Special Committee Practice
Two of our directors wrote Special Committees: Law and Practice, second edition published in 2014. This comprehensive book gives practitioners a thorough working knowledge of special committee law, how to best utilize special committees, and the role of special committee members. Special Committees: Law and Practice is an authoritative reference on this important area of law—and a testament to the depth of knowledge and practical experience that our firm brings to advising special committees.
Recent Complaint Unsuccessfully Challenged ‘Standard Plain Vanilla’ Rights Plan
Delaware Business Court Insider | August 16, 2023
In Building Trades Pension Fund of Western Pennsylvania v. Desktop Metal, a stockholder plaintiff brought derivative claims against Desktop Metal, Inc., alleging that a provision of the company’s rights plan, which was adopted in connection with a proposed merger transaction, impermissibly chilled the free exercise of stockholder voting with respect to the merger agreement at an…
‘In re Lordstown Motors’: Providing Relief From ‘Untold Chaos’
Delaware Business Court Insider | March 1, 2023
In In re Lordstown Motors, the Delaware Court of Chancery provides a roadmap for former special purpose acquisition companies (SPACs) to validate capital structure uncertainties stemming from the same court’s recent decision in Garfield v. Boxed. In Lordstown, the court makes clear that Section 205 of the Delaware General Corporation Law (the DGCL) is available as…
Recent Developments in Delaware Corporate Law
Spring 2023
This publication, which highlights recent corporate and alternative entity cases and statutory developments in Delaware, continues our long tradition of providing insight into the evolution of Delaware law. Our corporate and alternative entities teams, the largest and most recognized in the state, play a crucial role in Delaware. For decades we have contributed to the development…
Three Lessons From Three Years of Post-‘Marchand’ Caselaw
Delaware Business Court Insider | November 16, 2022
Just over three years ago, the Delaware Supreme Court held in Marchand v. Barnhill that the failure to maintain an internal monitoring system that could have prevented a deadly listeria outbreak gave rise to an actionable oversight claim against the board of directors under In re Caremark International Inc. Derivative Litigation. Although the Delaware Supreme Court…
Amendments to the DGCL Permit Officer Exculpation
Insights | October 2022
On August 1, 2022, Section 102(b)(7) of the Delaware General Corporation Law (the DGCL) was amended to permit a corporation to include in its certificate of incorporation a provision to eliminate or limit the monetary liability of certain corporate officers for breach of the duty of care. Previously, the protection afforded by a so-called exculpatory provision…
The Failure of the ‘Failing Business’ Exception Under Delaware Law
Delaware Business Court Insider | June 22, 2022
In Stream TV Networks v. SeeCubic, the Delaware Supreme Court vacated a permanent injunction imposed by the Delaware Court of Chancery that prohibited Stream TV Networks, Inc. and the Rajan brothers, who collectively held a majority of the company’s stock, from blocking a negotiated transfer of all of Stream’s assets to satisfy its secured creditors. In…
Delaware Custodians, Receivers and Trustees (Oh My!)
Delaware Business Court Insider | March 9, 2022
Under Delaware law, the board of directors is generally responsible for overseeing the business and affairs of the corporation. However, where the board is incapable or unwilling to act and in other unique circumstances described below, the Delaware General Corporation Law allows stockholders, directors, creditors and other interested parties to attempt to displace the board’s decision-making…
Recent Developments in Delaware Corporate Law
Spring 2022
This publication, which highlights recent corporate and alternative entity cases and statutory developments in Delaware, continues our long tradition of providing insight into the evolution of Delaware law. Our corporate and alternative entities teams, the largest and most recognized in the state, play a crucial role in Delaware. For decades we have contributed to the development…
Amendments to the DGCL Permit Captive D&O Insurance
The Harvard Law School Forum on Corporate Governance | February 24, 2022
The Delaware General Assembly has approved legislation amending Section 145 of the Delaware General Corporation Law (the “DGCL”) to authorize a Delaware corporation to use captive insurance, which is generally defined as insurance provided by or through a wholly-owned subsidiary funded by the corporation, to protect its current and former directors, officers and other indemnifiable persons…
Rosenbaum v. CytoDyn Inc.: A Review of Advance Notice Bylaws
Insights | December 2021
In Rosenbaum v. CytoDyn Inc., the Delaware Court of Chancery denied an insurgent group’s challenge to the rejection of their notice of director nominations by CytoDyn Inc. The Court’s opinion brings some clarity to an area of the law that “may not be as settled as one would think,” providing a framework for reviewing actions taken…
Dodd-Frank and Corporate Governance
Directors & Boards | 2021 Fourth Quarter
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was enacted in response to perceived excesses and other dysfunction in the financial markets that precipitated the 2008 financial crisis. The public discourse surrounding the adoption and implementation of Dodd-Frank — including the notion that institutions deemed “too big to fail,” unless appropriately restrained, would take…
SPAC Mergers Challenged for an Alleged Statutory Foot-Fault
Delaware Business Court Insider | November 17, 2021
Stockholder-plaintiffs have filed a number of complaints in the Delaware Court of Chancery challenging at least five mergers involving Delaware special purpose acquisition companies (SPACs) in the last four months alleging that the SPAC’s failure to solicit a “class vote” of the SPAC’s Class A Common stockholders in connection with certain amendments to the SPAC’s certificate…
Three Opinions on Fraud on the Board
Harvard Law School Forum on Corporate Governance | September 8, 2021
In a footnote in a two-page order issued in 2018, the Delaware Supreme Court quietly reminded corporate law practitioners that, per the 1989 case of Mills Acquisition v. Macmillan, a complaint seeking post-closing Revlon damages can survive a motion to dismiss without pleading nonexculpated breaches of fiduciary duty by a majority of directors so long as…
What Is Fraud on the Board? 3 Opinions Seek to Answer That Question
Delaware Business Court Insider | August 18, 2021
In a footnote in a two-page order issued in 2018, the Delaware Supreme Court quietly reminded corporate law practitioners that, per the 1989 case of Mills Acquisition v. Macmillan, a complaint seeking post-closing Revlon damages can survive a motion to dismiss without pleading nonexculpated breaches of fiduciary duty by a majority of directors so long…
Insights | June 2021
Proposed legislation would amend the Delaware General Corporation Law, the Delaware Limited Liability Company Act, the Delaware Revised Uniform Limited Partnership Act and the Delaware Revised Uniform Partnership Act to clarify, among other things, the treatmentof capital stock owned by the corporation, provide a safe harbor procedure for the ratification of void and voidable acts and…
The Delaware Court of Chancery Enjoins “Extreme, Unprecedented” Stockholder Rights Plan
Insights | March 2021
In The Williams Companies Stockholder Litigation, the Delaware Court of Chancery enjoined a stockholder rights plan, having described it as having “an extreme, unprecedented collection of features.” Nevertheless, the opinion does not signal a major shift in Delaware law with respect to the adoption and maintenance of stockholder rights plans.…
Elimination of Statutory Barriers May Lead to New Wave of Public Benefit Corporations
Delaware Business Court Insider | February 24, 2021
On August 1, 2013, a new subchapter of the General Corporation Law of the State of Delaware (the “DGCL”) was added to enable Delaware for-profit corporations to be incorporated as or to become a Delaware public benefit corporation, or “PBC.” Rather than being operated solely to maximize value for stockholders, like traditional corporations, PBCs are required…
Delaware Laws & Programs Affecting Business – 2020 Edition
2020
Delaware Laws & Programs Affecting Business presents an introduction to Delaware and an overview of the laws and programs relating to doing business in the State. Our economy is diverse, and our legal framework is intentionally crafted to foster robust business activity. Our widely copied business laws lead the nation in clarity and predictability. Government…
Business Law Today | January 6, 2021
Recent events have spurred a social justice movement that has called for companies to commit to inclusion and diversity, specifically in the composition of their boards of directors.* In light of the foregoing, on December 1, 2020, Nasdaq filed a proposal with the U.S. Securities and Exchange Commission (“SEC”) that, if approved by the SEC, would condition…
Delaware Supreme Court on Costs in an Appraisal Proceeding
Insights | December 2020
In a recent decision, the Delaware Supreme Court held that an appraisal proceeding did not involve a violation of any law or rule and therefore did not constitute a “Securities Claim” giving rise to coverage for losses under the terms of a directors’ and officers’ insurance policy. It provided guidance regarding how the Delaware courts will…
Recent Developments Regarding ‘Wolf Pack’ Provisions in Rights Plans
Delaware Business Court Insider | November 11, 2020
A traditional stockholder rights plan remains one of the most effective tools a board of directors may use to protect the corporation’s stockholders from the threat of a hostile or abusive takeover. Rights plans often include specific provisions designed to address unique threats or issues facing the corporation. One such provision is an “acting in concert”—or…
Court of Chancery Permits $4.3 Billion Interim Distribution in Altaba Dissolution
Delaware Business Court Insider | November 4, 2020
In In re Altaba, the Delaware Court of Chancery, ruling at a preliminary stage of the dissolution process, authorized Altaba Inc. to make an interim liquidating distribution of up to $4.3 billion to its stockholders. Vice Chancellor J. Travis Laster’s opinion is noteworthy because it is one of the few opinions to authorize an interim distribution…
Special Committees: Law and Practice (2nd edition)
2014
Written by knowledgeable practitioners in corporate law and special committee practice, this comprehensive book provides in-depth explanations on the uses, benefits and disadvantages of special committees.
32nd Annual Ray Garrett Jr. Corporate and Securities Law Institute
May 3, 2012
Director Gregory P. Williams will speak at this CLE-accredited institute in Chicago.
Mergers & Acquisitions 2011: What You Need to Know Now
September 23, 2011
C. Stephen Bigler will speak at this PLI seminar in Chicago focused on exploring the fascinating state of M&A and the trends to be aware of in the year ahead.
Mergers & Acquisitions 2011: ÿWhat You Need to Know Now
September 8, 2011
C. Stephen Bigler will speak at this PLI seminar in New York focused on exploring the fascinating state of M&A and the trends to be aware of in the year ahead.
Trenwick America Litigation Trust v. Ernst & Young LLP
August 11, 2008
Delaware Court Of Chancery Holds That No Cause Of Action For “Deepening Insolvency” Exists Under Delaware Law
OHC Liquidation Trust v. Credit Suisse First Boston, et al.
June 12, 2008
Equitable defense results in dismissal of claims against financial advisor.