Key 2011 Corporate Law Decisions Include Notable Stockholder Victories In The Delaware Courts
The last year saw courts hand down significant decisions in the area of corporate law, many of which are discussed in the ABA Business Corporate and Litigation Committee's forthcoming Annual Review of Developments in Business and Corporate Litigation.
Decisions of import to corporate transactions practitioners included Galaviz v. Berg, 763 F. Supp. 2d 1170 (N.D. Cal. 2011), in which the U.S. District Court for the Northern District of California declined to enforce an exclusive forum selection bylaw adopted by the board of directors of Oracle Corporation, calling into doubt the utility of such provisions at least where they are not approved by stockholders. In Olson v. ev3, Inc., 2011 WL 704409 (Del. Ch. Feb. 21, 2011), the Delaware Court of Chancery also generally approved of so-called "top-up options"--common merger agreement provisions requiring the issuance of shares sufficient to enable an acquirer to close a short-form merger. In GRT, Inc. v. Marathon GTF Technology, Ltd., 2011 WL 2682898 (Del. Ch. Jul. 11, 2011), the court enforced a provision in a purchase agreement governed by Delaware law that in effect shortened the statute of limitations to bring an action for a breach of certain representations, remarking that Delaware law is "more contractarian than that of many other states." In addition, in In re Smurfit-Stone Container Corp. S'holder Litig., the Court of Chancery held that so-called Revlon duties and accompanying heightened scrutiny apply to sales transactions where stockholders receive a roughly even mix of cash and the acquirer's stock. 2011 WL 2028076 (Del. Ch. May 24, 2011). To read the full article, click here.