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I did a Lexis search, and found zero citations to Dodge v. Ford in the New York Times (though it appears there was at least one online reference in 2015), and only three in the Wall Street Journal – two of which were factual recitations regarding the history of corporate governance debates.

The third was yesterday’s op-ed, arguing that the shareholders of the companies that quit Trump’s manufacturing council (an issue discussed earlier this week by Marcia), as well as shareholders of other companies that purport to take a “moral” stance, should sue corporate executives for destroying shareholder value.  The authors, Jon L. Pritchett and Ed Tiryakian, argued:

Memo to activist CEOs: Dust off your notes, open your textbooks, and reread the basics of corporate finance taught at every credible university. The fiduciary responsibility of a CEO is to safeguard the company’s assets and acknowledge this overriding principle: “It’s not our money but that of the shareholders.”

In today’s heated political climate, some executives have rejected the fundamentals in favor of short-term publicity for themselves and their corporations. When several CEOs quickly resigned over the past few days from the now-disbanded White House Council on Manufacturing, they

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Whenever new corporate governance terms are developed that function to diminish shareholder power – like arbitration provisions, or forum selection, or loser-pays – concern develops among (at least some) investors that these terms will become the norm.  It’s not about one company that does or doesn’t adopt the term; it’s about the fear that several companies will adopt them, and eventually it will become standard, so that shareholders will not be able to exert discipline by avoiding companies with the disfavored provision.

In other words, companies will behave as though they’re in a cartel when selecting these terms, and they’ll be able to do it because they can easily coordinate with each other.  There are a limited set of underwriters and white shoe law firms that will advise them, and those entities will propagate the new development throughout the system.  Cf. Elisabeth de Fontenay, Law Firm Selection and the Value of Transactional Lawyering, 41 J. Corp. Law 393 (2015) (explaining the value-added by elite law firms – knowledge of the latest in deal technology); Roberta Romano & Sarath Sanga, The Private Ordering Solution to Multiforum Shareholder Litigation  (finding that law firm advice is behind the adoption of forum-selection clauses…

Today, the Delaware Supreme Court issued its much-awaited decision in DFC Global Corp. v. Muirfield Value Partners, LP, et al., regarding the proper role of the deal price when determining fair value in a corporate appraisal action.  In an opinion by Chief Justice Strine, the court rejected calls for a bright-line rule deferring to the price, but emphasized that market pricing is generally the best evidence of value.  In one passage that struck me as curious, the court held that the purpose of an appraisal action is not to award dissenters the very highest price their shares could command, but to “make sure that they receive fair compensation for their shares in the sense that it reflects what they deserve to receive based on what would fairly be given to them in an arm’s-length transaction.”  Which, you know, sounds an awful lot like deal price.  And not a whole lot like valuing a company “as a going concern, rather than its value to a third party as an acquisition,” In re Petsmart, 2017 WL 2303599 (Del. Ch. May 26, 2017), which is how appraisal has previously been described.

I will leave it to others to analyze the implications…

I’ve previously posted about the problem of multiforum litigation, and how it’s very much in Delaware’s interest to figure out a way to keep cases flowing to its courts.  In particular, Delaware’s recommendation that derivative plaintiffs seek books and records before proceeding with their claims simply invites faster filers to sue in other jurisdictions – and invites defendants to seek dismissals against the weakest plaintiffs, which will then act as res judicata against the stronger/more careful ones.   As VC Laster put it during a hearing in Avi Wagner v. Third Avenue Management, LLC, “The defendants want to get out of litigation, and the best way to do it is to fight the weak plaintiff . . . [T]hey have the plaintiff they want and the allegations they want….  This whole system of multi-forum litigation … creates a lot of systemic dysfunction. It’s certainly true that things should be resolved in one forum and at one time, but it doesn’t follow from that … that they should necessarily be followed under a system that incentivizes the filing of a fast complaint by a weak plaintiff so that defendants have the high ground.” (May 20, 2016).

Delaware’s latest proposal to…