Lewis H. Lazarus

2 weeks ago | jdsupra.com | Sarah Ennis |Lewis H. Lazarus

In this en banc decision, the Delaware Supreme Court answered a certified question from the United States Court of Appeals for the Seventh Circuit concerning whether the employee choice doctrine (under which courts do not review forfeiture-for-competition provisions for reasonableness so long as the employee voluntarily terminated their employment) applies outside of the limited partnership context.

2 weeks ago | jdsupra.com | Sarah Ennis |Lewis H. Lazarus

After a Delaware corporation issued a proxy statement and told the stockholders that an amendment to increase its authorized shares of common stock required only a majority-of-the votes-cast, a plaintiff stockholder sought to enjoin the company from proceeding on the ground that the amendment required a majority-of-the-outstanding-shares-entitled-to-vote. The only issue was the voting standard. The relevant charter provision provided that “The number of authorized shares of Common Stock . . .

1 month ago | jdsupra.com | Albert Carroll |Sarah Ennis |Lewis H. Lazarus

The board of a Delaware corporation recommended that the corporation reincorporate as a Nevada corporation subject to a majority vote under Section 266 of the Delaware General Corporation Law. A stockholder filed an action alleging that the conversion was subject to a supermajority 66 2/3% vote pursuant to a provision – Article X – of the corporation’s certificate of incorporation that required such a vote “to amend or repeal, or adopt any provision” of the certificate.

1 month ago | jdsupra.com | Sarah Ennis |Lewis H. Lazarus

The Court of Chancery in this stockholder class action refused to award attorneys’ fees where the Court found the plaintiff proved at trial that the controller breached his fiduciary duties in a self-dealing merger transaction, but the Court but also found the plaintiff failed to prove damages.

1 month ago | jdsupra.com | Lewis H. Lazarus

Originally published in ALM's Delaware Business Court InsiderWhether a party is a controlling stockholder in a conflicted transaction determines the standard of review. If a stockholder owns more than 50% of the voting shares and therefore can control the board, there is no question it is a controlling stockholder. If the stockholder owns a large block but less than a majority, then whether it is a controlling stockholder is context dependent.