Court Of Chancery Explains New Statutory Authority To Correct Corporate Mistakes
In Re Numoda Corporation Shareholders Litigation, C.A. 9163-VCN (January 30, 2015)
This is an important decision because it explains the effect of the new Sections 204-205 to the DGCL. Those provisions permit the correction of corporate actions that failed to comply with the requirements of the DGCL, such as having a board resolution before issuing stock. The decision holds that the Court's authority is limited to when some actual "action" has occurred, not just a "water cooler discussion" and there must be some real evidence to confirm that action was intended to have the consequences the plaintiff asks the Court to confirm.