The Board considered that Texas, unlike Delaware, has statutory provisions that would allow (though not require) MercadoLibre’s directors and officers to broadly consider the Company’s short-term and long-term interests in exercising their fiduciary duties,
New decision out from a California appellate court enforcing Rivian’s charter provision requiring that federal Securities Act cases be brought in federal, rather than state, court.
I realize the ship has pretty much sailed on this issue, but I wrote a whole paper about why this trend is problematic both from a doctrinal and a policy perspective.
My issue doctrinally, of course, is that I do not think charters are contracts, and I also believe the question of contract formation is not part of the internal affairs doctrine, and therefore is not dependent on the law of the chartering state. On that latter point, at least, Delaware agrees with me; in Salzberg v. Sciabacucchi, the Delaware Supreme Court conceded that forum provisions governing federal law claims are not, strictly, governed by the internal affairs doctrine, although the court argued that other states should respect them nonetheless.
These doctrinal points, however, tend to be lost when the issue reaches non-Delaware courts, and Bullock v. Rivian is no exception. There, the California court not only situated the dispute squarely within the internal affairs doctrine, but also assumed that charter-based forum provisions are in fact contractual agreements, without even attempting
Interesting opinion out of the Delaware Court of Chancery this week by Vice Chancellor Cook. Short version: Company adopted advance notice bylaws; shareholders challenged them as a breach of fiduciary duty; in Siegel v. Morse, VC Cook held the dispute was not ripe for review because the shareholders had not proposed to mount their own proxy contest.
Following Kellner v. AIM Immunoctech, VC Cook distinguished between facial challenges, which claim that the bylaws cannot be enforced under any set of circumstances, and as-applied challenges, which depend on a particular set of facts. Facial challenges, per Kellner, are only appropriate when the bylaw is unauthorized under Delaware statutory law or the corporate charter, and here, the shareholders conceded that theirs was an as-applied challenge, rooted in what they claimed was an improper motive by the board to chill all shareholder activism by imposing excessive disclosure requirements. For as-applied challenges, VC Cook held, ripeness requires a plaintiff who is actually contemplating a proxy contest; here, the plaintiffs disclaimed any such intention; therefore, the claim was not ripe.
The difficulty is, defensive measures have previously been the subject of challenges outside the context of active contests for control. For example
From these discussions, we understand that there is a desire to preserve, after the Redomestication, certain stockholder rights that are currently in our current Fifth Amended and Restated Certificate of Incorporation (the Delaware Charter). Since the Board of Directors continues to believe there are many important reasons the Redomestication is advisable and in the best interests of the Company and its stockholders, we have updated the proposed Nevada Charter to preserve certain stockholder rights under our Delaware Charter within the statutory
This week, in Defeo v. IonQ, the Fourth Circuit headed down a path of holding that short seller reports categorically can never reveal the truth of a fraud to the market – and therefore cannot establish loss causation in a Section 10(b) case – before pulling up at the last minute and concluding maybe they can, if the report is backed up by empirical facts. In general, though, according to the court, since the reports often rely on anonymous sources that they admit are selected and paraphrased to paint a
negative narrative, they cannot support the element of loss causation in the usual course.
We’ve been here before. It is bizarre to me that courts would look at actual market movement in response to an accusation of fraud and decide, on the pleadings, that no reasonable investor would take the accusation seriously. They did! They did take it seriously, right there. You can tell because the stock price went down.
The concern that is transparently motivating the court is that the short seller may be misrepresenting the evidence of fraud. But if that’s the case, there’s an element for that – falsity. If the plaintiffs cannot
Last week I highlighted three Nevada reincorporations and one Texas reincorporation after Delaware passed SB21. A week has passed, and there are four more. The new firms are:
This brings my total post-SB21 reincorporations to eight. Seven to Nevada and one to Texas.
The stated reasoning here appears consistent with what happened the week before.
MSG Entities
Rather than break out MSG Sports and MSG Entertainment separately here, I’m just going to draw from MSG Sports. Although I haven’t run a redline or anything to confirm, the stated rationale seems the same for both firms. There are three main bullet points for it:
Xoma Royalty Corp.
Xoma makes many of the points others have highlighted. It also indicates that it thinks it might be able to get a better deal on D&O insurance by
Yesterday, The New York Times published the attached article. [this one, on the Paul, Weiss settlement] Many of you may have read about the referenced brokered deal between the Paul, Weiss firm and the Trump administration. But did you consider the related firm decision making as a matter of business associations law? I want us to engage with that in lieu of today’s class, using our knowledge of partnership
| Accounting & Business Law One University Place Shreveport, LA 71115-2399 318.797.5241 (Fax) 318.798.4147 |
Instructor of Business Law
9-Month Non Tenure-Track Position
The AACSB accredited College of Business at Louisiana State University Shreveport (LSUS) seeks applications for an instructor position for Business Law starting August 2025. Applications will be considered from all candidates who meet our AACSB qualifications.
The selected candidate will report to the Chair – Department of Accounting and Business Law, and will be expected to teach at both the undergraduate and graduate levels in face-to-face and online settings, maintain AACSB qualification in any of the four categories (scholarly practitioners, scholarly academic, instructional practitioners or practice academics), and actively engage in service to the department, college, university, and community.
Minimum Qualifications: Applicants must possess a Juris Doctor degree from an ABA-accredited law school. Candidates must demonstrate teaching excellence.
Preferred Qualifications: Strong preference will be given to candidates who are admitted to practice law by the highest court of at least one of the United States. Preference will be given to candidates who have at least one year of experience teaching Business Law classes.
Application: To apply for this position, a CV, cover letter, statement of teaching philosophy
The Board considered Nevada’s statute-focused approach to corporate law and other merits of Nevada law and determined that Nevada’s approach to corporate law is likely to foster more predictability than Delaware’s approach at the current time. The Board believes that Nevada can offer more predictability and
This week, I offer miscellaneous collection of things that caught my attention recently….
In Connection With. I’ve been keeping track of cases involving a pattern where, roughly, company A and company B are somehow related; company B makes fraudulent statements that affect company A’s price; and shareholders of company A sue company B. Blog posts here and here and here and here and here and here – also, Mike Levin and I discussed the issue in a Shareholder Primacy podcast (here at Apple, here at Spotify, here at YouTube).
Anyhoo, the latest entry in this series is In re General Motors Co. Securities Litigation, 2025 WL 952479 (E.D. Mich. Mar. 28, 2025), where shareholders of GM brought Section 10(b) claims against both GM and its majority-owned subsidiary, Cruise, alleging that both companies made false statements about the state of Cruise’s autonomous vehicle technology, and that the truth was disclosed when a Cruise car struck and dragged a pedestrian in San Francisco. Though the court concluded that plaintiffs failed to identify any false statements made by GM or its officers, Cruise officers – and the Cruise company, on its blog – had falsely described the