Proposed Amendments to the DGCL to Limit Applicability Of the Delaware Supreme Court’s Holding in ‘ATP Tour’

June 18, 2014

Publication| Corporate Transactions| Corporate & Chancery Litigation

In ATP Tour, Inc. v. DeutscherTennis Bund, the Delaware SupremeCourt, responding to fourcertified questions of law from theU.S. District Court of the District ofDelaware, held that a fee-shiftingprovision of a Delaware nonstockcorporation’s bylaws applicable tointra-corporate disputes could bevalid and enforceable (29 CCW 161,5/21/14). Although the Court emphasizedthat it was only addressingwhether the nonstock corporation’sbylaw was facially valid—and wasexpressly not addressing whetherthe bylaw or any application of itwould be valid under a specified setof circumstances—the opinion resultedin a discussion among corporatelaw practitioners as to whetherstock companies should consideradopting fee-shifting bylaws.

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