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Category Archives: Corporate Considerations

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Corporate Coverage Considerations: California Appellate Court Confirms Enforceability of Delaware Forum Selection Bylaws

Posted in Corporate Considerations
In an issue of first impression in California, a California appellate court has rejected a shareholder plaintiff’s effort to avoid enforcement of a Delaware company’s forum selection bylaw, despite the shareholder’s arguments that the bylaw was inconsistent with California law and was otherwise unreasonable given the manner and timing of its adoption.  Drulias v. 1st… Continue Reading

Delaware Chancery Court Rules Federal Forum Selection Clause in Corporate Charter Unenforceable

Posted in Corporate Considerations
Ruling on summary judgment, the Delaware Chancery Court has held that forum selection clauses in three separate companies’ corporate charters requiring that any claims under the Securities Act of 1933 be brought in federal court are “ineffective and invalid.”  Sciabacucchi, et al. v. Salzberg, et al., C.A. No. 2017-0931-JTL (Del. Ch. Dec. 19, 2018).  In… Continue Reading

No Legal Fees for M&A Objector Where Transaction Resulted in Loss of Standing to Object

Posted in Corporate Considerations
The Delaware Chancery Court has dismissed an action brought by three plaintiffs’ law firms seeking legal fees in connection with merger litigation that was initially successful, but which ultimately failed on appeal when the transaction closed and the objector lost standing.  Bragar Eagel & Squire, PC, et al. v. Kinder Morgan Energy Partners, LP, et… Continue Reading

No Second Bite for Derivative Plaintiffs: Delaware Supreme Court Rebuffs Invitation to Undermine Preclusive Effect of Prior Unsuccessful Derivative Action

Posted in Corporate Considerations
The Delaware Supreme Court, once again addressing questions of issue preclusion in the context of shareholder derivative litigation, has rejected suggestions by the Chancery Court that giving preclusive effect to initial, unsuccessful efforts to litigate demand futility violates the Due Process rights of shareholders attempting to bring a subsequent action elsewhere. California State Teachers’ Retirement… Continue Reading

Inviting a Second Bite at the Apple: Delaware Chancery Court Suggests New Approach to Evaluating Preclusive Effect of Prior Unsuccessful Derivative Litigation

Posted in Corporate Considerations
In response to the Delaware Supreme Court’s question in connection with remand, the Delaware Chancery Court has suggested reevaluation of its prior willingness to dismiss subsequent derivative litigation where an earlier derivative action has been dismissed due to demand futility.  In re Wal-Mart Stores, Inc. Delaware Derivative Litigation, C.A. No. 7455-CB (consol.), supp. op. (Del.… Continue Reading