LexisNexis® Legal Newsroom
Raising Capital Outside of the United States

Much has been said and written about how start-up founders can raise initial capital to launch and grow their businesses by getting funds from their friends and family, angel investors or VCs. I would like to bring to your attention an additional source of capital: foreign investors and U.S. citizens...

Delaware Court of Chancery Upholds Bylaws with Forum Selection Clause

Boilermakers Local 154 Retirement Fund v. Chevron Corporation , C.A. No. 7220-CS (Del. Ch. June 25, 2013) [ an enhanced version of this opinion is available to lexis.com subscribers ]. Issue Addressed : Enforceability of bylaws adopted by the Board of Directors providing that litigation relating...

Exclusive Forum Appeal

Am I the only one slightly disappointed that the plaintiffs in the Chevron exclusive forum bylaw provision case decided not to pursue their appeal to the Delaware Supreme Court? I'm interested in the question of how the court would treat forum provisions mostly because I'm thinking about the...

Chevron Seeks to Certify Question

So, you'll remember the Boilermakers case in which the validity of Chevron and FedEx's forum provision bylaws were challenged in the Delaware Chancery Court. In that case, Chancellor Strine was asked to rule on the facial validity of the forum selection provisions in the bylaws of both Chevron...

Delaware Supreme Court Upholds Fee-Shifting Provision in Bylaws

ATP Tour, Inc. v. Deutscher Tennis Bund , Del. Supr., No. 534, 2013 (May 8, 2014) [ an enhanced version of this opinion is available to lexis.com subscribers ]. Momentous Issue Addressed : The Delaware Supreme Court decided certified questions of law for the District of Delaware regarding whether...

The Latest on Arbitration Clauses in Corporate Bylaw Provisions

In a recent post , I noted the Delaware Supreme Court’s ruling upholding the validity of bylaw provisions shifting the costs of litigation to an unsuccessful intra-corporate litigation claimant, which is the latest in a series of judicial decisions in which courts have recognized the authority...

Proposed Addition to Delaware Corporate Statute Regarding Fee Provisions in Bylaws

A proposed new addition as well as related amendments to the Delaware General Corporation Law would limit the impact of a recent Delaware Supreme Court decision in ATP Tours, Inc. v. Deutscher Tennis Bund (No. 534, 2013, May 8, 2014), highlighted on these pages [ an enhanced version of this opinion is...

Delaware Legislative Revision Proposed to Restrict Fee-Shifting Bylaws Introduced

As discussed in a recent post ( here ), in a May 8, 2014 decision the Delaware Supreme Court upheld the facially validity of a nonstock corporation’s bylaw provision shifting attorneys’ fees and costs to unsuccessful plaintiffs in intra-corporate litigation. Because the court’s holding...

Delaware Corporate Bylaws: Even If the Company Can’t Fee Shift, It Can Still Forum Select

In light of the recent legislative initiative to restrict Delaware stock corporations’ use of fee-shifting bylaws, companies incorporated in Delaware have, as described in a recent Law 360 article ( here , subscription required) a “smaller more defined toolbox” to reduce the burdens...

Delaware Drops Fee-Shifting Bar

A couple of weeks ago, it looked the stars were aligning in a once in a generation way that would have the plaintiffs and defendants bar stand behind an unusual amendment to the Delaware code. That amendment would effectively prohibit firms from adopting fee-shifting bylaws. Following ATP, it became...

Though Delaware Legislature Has Tabled Action, Upcoming Judicial Review of Fee-Shifting Bylaws Seems Likely

The Delaware Supreme Court stirred up quite a bit of controversy earlier this year in the ATP Tours, Inc. v. Deutscher Tennis Bund case when it upheld the facial validity of a fee-shirting by law [an enhanced version of this opinion is available to lexis.com subscribers] . The bylaw provided that an...

Delaware Court of Chancery Hears Fee-Shifting Bylaws Argument

After the Delaware Supreme Court decision in ATP Tour, Inc. v. Deutscher Tennis Bund , Del. Supr., No. 534, 2013 (May 8, 2014) [an enhanced version of this opinion is available to lexis.com subscribers] , highlighted on these pages, in which the court upheld fee-shifting bylaws, a number of companies...

Delaware Chancery Court Upholds “North Carolina Only” Forum Selection Bylaw

Following the Delaware Chancery Court’s June 2013 ruling upholding the facial validity of the bylaw of Chevron Corporation designating Delaware as the exclusive forum for intra-corporate disputes, the adoption of forum selection bylaws has become mainstream . But while a number of companies have...

Update on Fee-Shifting Bylaw Issue in Pending Delaware Court of Chancery Case

Recent activity in the Delaware Court of Chancery has followed the Delaware Supreme Court’s May 2014 decision in ATP Tour, Inc v. Deutscher Tennis Bund , 91 A.3d 554 (Del. 2014), highlighted on these pages, which upheld a fee-shifting bylaw, at least in principle [ an enhanced version of this opinion...

Oklahoma Legislature Adopts Derivative Litigation Fee-Shifting Provision

One of the most interesting recent developments has been the onset of innovative litigation reform efforts in the form of bylaw revisions. Among the most intriguing of these efforts involves fee shifting bylaws, whereby an unsuccessful claimant in intracorporate litigation must pay the other party’s...

IPO Companies and Fee-Shifting Bylaws

One of the more interesting recent developments in the D&O liability arena has been the emergence of issues surrounding fee-shifting bylaws. As readers will recall, in May 2014, the Delaware Supreme Court in the ATP Tours case upheld the validity of a non-stock corporation’s bylaw imposing...

Two Legal Surveys: Foreign Disputes in U.S. Courts and Fee-Shifting Bylaws

An ever-present anxiety for globally-active non-U.S. companies is the possibility that they might find themselves having to deal with litigation in U.S. courts. This concern is warranted because certain attributes of the U.S. legal system – including the absence of loser pays attorneys’ fee...

More on ATP and Fee-Shifting

Stephen Bainbridge weighs in on fee-shifting bylaws and makes the argument that they are necessary to resolve the litigation crisis : There is a serious litigation crisis in American corporate law. As Lisa Rickard recently noted, “where shareholder litigation is reaching epidemic levels. Nowhere...

Battle Builds in Delaware Over Fee-Shifting Bylaws

Earlier this year, after the Delaware Supreme Court upheld the facial validity of fee-shifting bylaws in the case of ATP Tour, Inc. v. Deutscher Tennis Bund (as discussed here ), a legislative initiative quickly emerged to restrict the case’s holding to Delaware non-stock companies. However, the...

Delaware Court of Chancery Analyzes Statutory Basis for Validity of Bylaws and Director Action

Sinchareonkul v. Fahnemann , C.A. No. 10543-VCL (Del. Ch. Jan. 22, 2015) [ an annotated version of this statute is available to lexis.com subscribers ] . Several aspects of this Court of Chancery opinion make it noteworthy. First, this declaratory judgment action seeking to invalidate bylaws that...

Another Litigation Reform Bylaw Variant: The Minimum Stake to Sue Bylaw

In prior posts , I have noted the growing phenomenon of companies adopting various types of bylaws as a self-help version of litigation reform. Delaware’s courts have already approved the facially validity of both forum-selection bylaws and of fee-shifting bylaws , although measures pending in...

Delaware Proposes New Fee-Shifting and Forum Selection Legislation

Legislation is being proposed to ask the Delaware Legislature to limit the ability of corporations to adopt fee-shifting provisions in their charter and bylaws, but to provide additional support for adopting forum selection clauses in those same corporate documents. The proposed legislation is available...

A Q&A with Mark Lebovitch of Bernstein Litowitz: A Plaintiffs’ Counsel’s Perspective on the Fee-Shifting Bylaw Debate

One of the more significant recent developments in the corporate and securities litigation arena has been the emergence of the debate over fee-shifting bylaws following the Delaware Supreme Court’s May 2014 decision in ATP Tour, Inc. v. Deutscher Tennis Bund [ an enhanced version of this opinion...

Delaware Legislature Passes Fee-Shifting Bylaw Prohibition — What Questions Remain?

In a late night session on June 11, 2015, the Delaware House of Representatives overwhelmingly passed S.B. 75, which prohibits Delaware stock corporations from adopting “loser pays” fee-shifting bylaws and which confirms that Delaware corporations may adopt bylaws designating Delaware courts...

Delaware Supreme Court Reinforces Importance of Clear and Precise Bylaw Provisions and Specifically Drafted Notices of Annual Meetings

by John Stigi In Hill International, Inc. v. Opportunity Partners L.P. , No. 305, 2015, 2015 Del. LEXIS 322 (Del. July 2, 2015), the Delaware Supreme Court affirmed the Court of Chancery’s grant of injunctive relief as it recognized the plaintiff stockholder’s — as opposed to defendant...