Court Of Chancery Requires Strict Adherence To DGCL To Split Stock
Stock splits have often been a problem, especially for non-Delaware lawyers who somehow think that all they need to do is have the Board decide to split the company's stock. Not so. This decision sets out the 3 essential steps to follow. Moreover, pleas to the Court's equitable powers to uphold what parties intended to do, even if they messed up the formalities, are not going to work. For as the Court held, in the area of a Delaware corporation's capital structure, formalities must be followed to achieve certainty. Hence, in this area at least, "law trumps equity".