Delaware General Corporation Law

As previously discussed in our March 26 advisory titled, “Virtual Shareholder Meetings in the Wake of COVID-19: Legal and Practical Considerations,” the Securities and Exchange Commission issued guidance to public companies on providing notice of a change to a virtual shareholder meeting in the wake of the coronavirus (COVID-19) pandemic.
Continue Reading Proposed Amendments to the Delaware General Corporation Law Concerning Virtual Shareholder Meetings During Emergency Conditions

The Council of Institutional Investors (CII), an investor advocacy association primarily for pension funds and local governments, has put forth a proposal to amend the Delaware General Corporation Law to limit the ability of publicly-traded Delaware corporations to maintain multi-class common stock voting structures (i.e., high-vote/low-vote stock structures).
Continue Reading Institutional Investor Advocacy Group Proposes Limits to Multi-Class Voting by Delaware Companies

On August 1, a number of amendments to the Delaware General Corporation Law (DGCL) went into effect. Notably, several of the amendments modified sections of the DGCL pertaining to (1) two-step mergers effected under Section 251(h) of the DGCL, and (2) appraisal rights and proceedings.

Section 251(h) Mergers

DGCL Section 251(h) provides a mechanism for a buyer to effectuate the negotiated acquisition of a Delaware-domiciled publicly-traded corporation by a tender offer to purchase at least a majority of outstanding shares of the target, followed by a short-form merger to acquire any shares not tendered in such offer. This back-end merger does not require stockholder approval, thereby saving the buyer the time and expense involved in preparing and filing a proxy statement and holding a stockholders’ meeting if Delaware’s standard short-form merger threshold (90%) is not satisfied. The 2016 amendments to the DGCL clarified certain Section 251(h) requirements and increased the availability of such short-form mergers to potential buyers.
Continue Reading 2016 Amendments to Delaware General Corporation Law Highlight Two-Step Mergers and Appraisal Rights

On June 24, Delaware’s Governor signed legislation approving amendments to the Delaware General Corporation Law (DGCL). While annual amendments to the DGCL typically involve technical fixes, this year’s legislation addresses a number of substantive issues described below:
Continue Reading Delaware Amends Its Corporate Law to Prohibit Fee-Shifting, Approve Exclusive Forum Provisions and Facilitate At-The-Market Offerings