Category: M&A + corp. governance
Ninth Circuit Upholds Delaware Forum-Selection Clause, Dismisses Federal Derivative Action
On June 1, 2023, the US Court of Appeals for the Ninth Circuit held in a split en banc decision that forum-selection clauses requiring shareholders to file derivative claims in the Delaware Court of Chancery are enforceable as applied to claims asserted derivatively under Section 14(a) of the Securities Exchange […]
The ‘State’ of Delaware
At the Berkeley Fall Forum on Corporate Governance in November 2022, Cooley partner Sarah Lightdale and University of California, Berkeley professor Stavros Gadinis co-moderated a panel with Chancellor Kathaleen St. J. McCormick and Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery, where they discussed notable developments in […]
Delaware Advance Notice Decisions Highlight Move Toward Enhanced Scrutiny of Board Actions, Even Where Conflicts Exist
Like US constitutional law, Delaware courts apply a tiered standard of judicial review to actions taken by the board of directors of corporations: In the constitutional arena, the failure to satisfy the strict scrutiny standard applied in First and Fourteenth Amendment cases led one constitutional scholar to remark that “strict […]
Delaware Finds Stockholder Claims Against SPAC Fiduciaries Subject to Entire Fairness Review
As SPAC IPOs broke records – in both value and volume – in 2020 (and again in 2021), it was inevitable that stockholder litigation would follow. More than 50% of the SPACs that went public in 2020 and 2021 are incorporated in Delaware, giving particular significance to SPAC litigation filed […]
Have Your Cake, and Closing Too: Invoking Prevention Doctrine, Delaware Chancery Court Grants Seller’s Request for Specific Performance in COVID-Related M&A Dispute
Chancellor McCormick’s opinion in Snow Phipps Group, LLC, et al. v. KCake Acquisition, Inc., et al. (Del. Ch. April 30, 2021) is 125 pages long, but she helpfully digests the holding in a single sentence on page 3: “Chalking up a victory for deal certainty, this post-trial decision resolves all issues in […]
Delaware Puts the Conduct of Business Covenant on Center Stage in COVID-Related M&A Dispute
In the months following the onset of the COVID-19 pandemic, a slew of parties filed lawsuits in US courts relating to M&A transactions that were signed prior to March 2020 and that buyers were seeking to terminate as a result of the pandemic. In these lawsuits, buyers commonly alleged one […]
Whataday for Special Committees: Salladay v. Lev Clarifies Committee Formation Requirements in Non-MFW Scenarios
In late February as the COVID-19 pandemic was accelerating, the Delaware Chancery Court issued an important decision that is likely to impact transactions during the expected recession. In Salladay v. Lev, C.A. No. 2019-0048-SG (Del. Ch. Feb. 27, 2020) (“Salladay”), the court held that a conflicted transaction – not involving a […]