OPINION
Dear Friends,
I told everyone these Chancery Court Chancellors were getting too powerful and too crazy — and no one listened to me under Andre Bouchard and Leo Strine! Now, thanks to the heroics by the Delaware legislature — they are reining in Delaware Chancery Court Chancellor Kathaleen McCormick and Vice Chancellor Travis Laster.
Why, folks, did it have to get to this point? I’ve been warning the public for YEARS about Chancery Court corruption!
Read the Law360 story below for more. Please send your feedback, it is welcome and appreciated.
Respectfully Yours,
JUDSON Bennett–Coastal Network
https://www.law360.com/articles/1859337/print?section=corporate
Del. Gov. Signs Hotly Contested Corp. Law Amendments
By Jeff Montgomery
Law360 (July 17, 2024, 7:54 PM EDT) — Delaware Gov. John Carney signed into law on Wednesday state code amendments allowing corporations to cede some governance rights to stockholders, as well as some state corporate oversight to other jurisdictions.
Delaware Gov. John Carney on Wednesday signed into law controversial changes to the First State’s General Corporation Law. (AP Photo/Evan Vucci)
The amendments to the Delaware General Corporation Law became the focus of a rare, public, national battle over the usually quiet, near annual update. It pitted, in part, stockholders and others wary that the deals would erode their voice in corporate governance and company interest in preserving abilities to delegate some rights to big stockholders usually reserved for company boards.
Disputes over the deals came to a head with Chancellor J. Travis Laster’s February decision in West Palm Beach Firefighters Pension Fund v. Moelis & Co., invalidating an agreement between investment bank Moelis & Co. and its founder Ken Moelis.
Some two months later, a Delaware State Bar Association panel produced draft legislation that would shield future Moelis-type rulings, with the state’s General Assembly sending the bill to Carney in late June. The measure, S.B. 313, won approval by a 34-7 margin in the state House after little more than an hour of testimony, a week after passing the state Senate without dissent.
Debate in the House was marked by rare public criticism of both Vice Chancellor Laster and Chancellor Kathaleen St. J. McCormick. The chancellor on April 12 sent a letter to the DSBA’s executive committee questioning the unusual rush to amend state corporation law and saying that “there is no justification for the rushed nature of the proposal, nor the unfair decision now being foisted” upon the committee in the waning weeks of Delaware’s six-month legislative session.
The governor signed the bill just ahead of a hearing Thursday on a bid by stockholder attorneys in the Moelis case for a $6 million fee for winning the case that triggered the law change. Counsel for Moelis argued that class attorneys should get a fee in the $450,000 to $600,000 range.
Attorneys for Saxena White PA, counsel for the stockholders in the Moelis case, said in a brief filed May 9 that the then-winning attorneys deserved far more for a “precedent-setting judgment invalidating a control device that distorted every director election and constrained effectively every board-level decision.”
During a Senate hearing on the bill in June, Srinivas Raju of Richards Layton & Finger PA, chairman of the state bar’s corporation law section, told the Delaware Senate Judiciary Committee that thousands of contracts might be called into question by the Moelis finding, and cautioned that the case had created uncertainty about “many types of contracts.”
–Editing by Melissa Treolo.
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