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Delaware General Corporation Law Amendments 2024: Governance Rights, Transaction Approval, Lost Premium Damages

Impact of Recent Chancery Court Decisions in Moelis, Blizzard, and Crispo v. Musk

A live 90-minute CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
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Wednesday, November 6, 2024 (in 4 days)

1:00pm-2:30pm EST, 10:00am-11:30am PST

(Alert: Event date has changed from 10/17/2024!)

or call 1-800-926-7926

This CLE webinar will guide corporate and general counsel on the July 2024 amendments to the Delaware General Corporation Law (DGCL), the anticipated impacts of those amendments on corporate governance and litigation, and practical considerations for corporations.

Description

Several amendments to the DGCL were signed into law on July 17, 2024. The amendments, which became effective Aug. 1, 2024, and apply retroactively, address several recent court of chancery decisions. However, some of the amendments have themselves sparked criticism.

One such amendment is new Subsection 122(18), which was enacted in response to the ruling in West Palm Beach Firefighters' Pension Fund v. Moelis & Co. Subsection 122(18) is a broad provision that authorizes stockholders and beneficial owners of stock to enter into agreements with a corporation, including, for example, agreements containing provisions that restrict corporate actions, grant the stockholders governance rights, or limit or prohibit the corporation from taking certain actions.

The amendments also included new and amended provisions within the DGCL pertaining to various procedural requirements in the merger approval process introduced in Sjunde AP-Fonden v. Activision Blizzard Inc., as well as amendments that address the decision in Crispo v. Musk and that clarify and allow for certain consequences for the early breach of merger agreements.

Another recent development in Delaware case law also dealing with controlling stockholders is the Court of Chancery’s decision in In re Sears Hometown and Outlet Stores, Inc. Stockholder Litigation, C.A. No. 2019-0978-JTL (Del. Ch.), which, for the first time, established the standard of review applicable to controlling stockholders’ exercise of their right to sell and right to vote shares. As an complement to the discussion of Moelis, the panelist will discuss the Court of Chancery’s In re Sears Hometown decision from earlier this year.

Counsel and companies need to understand the scope and effect of these amendments as well as prepare for how they will impact corporate governance and litigation practices.

Listen as Vincent J. Cannizzaro, III, Partner at Morris James, discusses the impactful 2024 amendments to the DGCL and best practices for counsel and corporations in light of the amendments.

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Outline

  1. Stockholder agreements
    1. Moelis
    2. New Subsection 122(18)
  2. Transaction approval requirements
    1. Blizzard
    2. New Section 147
    3. Amended Section 232
    4. New Section 268
  3. Authorization of lost premium damages provisions
    1. Crispo v. Musk
    2. Amended Section 261
  4. Takeaways and best practices

Benefits

The panelist will review these and other key issues:

  • What do the recent amendments to the DGCL indicate about stockholder agreements, transaction approval requirements, and lost premium damages provisions generally?
  • How will the recent amendments affect corporate governance and litigation?

Faculty

Cannizzaro, Vincent
Vincent J. Cannizzaro, III

Partner
Morris James

Mr. Cannizzaro, III, chairs the firm's Corporate/Mergers & Acquisitions practice. He is a seasoned corporate...  |  Read More

Grzaslewicz, Barnaby
Barnaby Grzaslewicz

Partner
Morris James

Mr. Grzaslewicz is a Partner in the Corporate and Commercial Litigation Groups. He is an experienced Delaware...  |  Read More

O'Connell, K. Tyler
K. Tyler O'Connell

Partner
Morris James

Mr. O'Connell represents companies, members of management, and investors in business disputes belore the...  |  Read More

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