Capital Markets & Securities Law Watch

Effective August 1, 2024, the Delaware General Corporation Law (DGCL) is amended in part to allow corporations to enter into agreements with stockholders that delegate governance rights to stockholders regardless of whether such rights are provided for in the corporation’s certificate of incorporation. Such stockholder agreements were previously found to violate Section 141(a) of the DGCL in the controversial case West Palm Beach Firefighters’ Pension Fund v. Moelis & Co.

A wave of substantially similar stockholders’ complaints have recently been filed by plaintiffs’ firms in the Delaware Court of Chancery challenging certain advance notice bylaw provisions commonly included in public companies’ bylaws.

In an effort to decrease the transmittal of COVID-19 by reducing person-to-person contact, and in recognition of the travel bans in place in several states, Delaware’s Governor John Carney issued an emergency order on April 6, 2020, relaxing notice requirements for changes in locations and dates of annual meetings in response to the threat of COVID-19.