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The Delaware Bankruptcy Insider is a premier blog designed to bring its readers a comprehensive analysis of the latest Delaware corporate bankruptcy news and rulings.  Brought to you by Ashby & Geddes, P.A.

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Ricardo Palacio, Esq.
(302) 504-3718
rpalacio@ashbygeddes.com

Gregory A. Taylor, Esq.
(302) 504-3710
gtaylor@ashbygeddes.com

Ashby & Geddes, P.A.
500 Delaware Avenue
P.O. Box 1150
Wilmington, Delaware 19899-1150
(302) 654-1888               

UPDATE – Significant Changes to DGCL Enacted

After much debate and criticism, proposed legislation making significant changes to the Delaware General Corporation Law (the “DGCL”) – previously discussed here – has been signed by Governor Markell after being passed by the General Assembly, and is set to take effect on August 1, 2015.  The amendments, which were proposed in Senate Bill 75, are notable in two ways:  (a) they prohibit Delaware stock corporations from including bylaw provisions shifting legal fees and costs to stockholder-plaintiffs in the event of unsuccessful litigation relating to an “internal corporate claim”; and (b) they permit Delaware corporations to include forum selection provisions in their organizational documents for “internal corporate claims,” provided Delaware is among the available fora.  Litigation relating to the new and amended statutes can be expected, including fights over the apparently dispositive distinction of whether a claim constitutes an “internal corporate claim.”  Although the practical impact of the new law continues to be the source of debate among practitioners and academics alike, judicial interpretation should help provide clarity to many companies whose current and prospective bylaws have been affected.