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…

Private company share trading seems to be the theme of the week.  The WSJ reported on it Tuesday, and on Wednesday, Mike Levin and I posted a new episode of Shareholder Primacy – where we talk about “withhold the vote” and “vote no” campaigns for corporate directors – but we also talk about the phenomenon of private company share trading.  (Here on Apple, here on Spotify, here on YouTube). 

The WSJ focuses on how accredited investors – which is a relatively low bar, for individuals, it just means someone who earns $200K per year, or has $1 million net worth (minus the primary residence) – are increasingly able to trade shares of pre-IPO companies on sites like EquityZen and Forge Global.

But the WSJ only glancingly references the point that Mike and I focused on in the podcast: The investors aren’t trading shares of the operating company; they’re trading shares of SPVs, which themselves own shares of the operating company.  This is something I posted about before, here – it’s a way to avoid the securities law requirement that companies begin public reporting if they have 2,000 investors holding a single class of equity.

Except…

Is a question I get asked a lot, especially after Musk offered an enthusiastic gesture that absolutely, positively, in no way resembled a Nazi salute pleasedon’tsueme. 

And the answer is – no. 

Even under the law of Delaware-before-SB-21 (and before Texas’s “hold my beer” alternative, which would among other things, prevent not only shareholders, but the corporation’s own board, unprompted, from suing a director or officer in the right of the corporation for anything other than fraud, intentional misconduct, ultra vires acts, or knowing violations of law), this cannot be the basis for a claim by Tesla’s shareholders against Elon Musk.

As Tesla’s CEO and a member of the board, Elon Musk owes Tesla a duty of care, and a duty of loyalty.  That means he cannot run Tesla with gross negligence – which, under Delaware law (let’s assume Texas law is no more strict), would be defined as akin to recklessness – and he cannot be disloyal, which means acting under a conflict of interest, intentionally trying to harm the company, or intentionally failing to take action to benefit Tesla when he knows he has a duty to take such action.

Let’s start with loyalty.  Whatever…

Meredith Ervine at Deallawyers highlights this blog by Milbank on Advance Notice Bylaws. Two things stand out to me.

First, apparently companies are now requiring nominating activists to vote only their long positions, not borrowed shares:

While lending shares of the corporation to cover short sales may provide income for large fund complexes, it is unlikely that these fund complexes (or other long-term holders) wish to promote empty voting in a contested corporate election.  Permitting the voting of borrowed shares by an activist – amplifying the activist’s voting power when there is no meaningful economic stake in the shares being voted – misaligns voting power with the economic consequences of the vote and does not promote good long-term decision making. The Alignment ANB accordingly requires the nominating stockholder and allied participants in the solicitation to waive their right to vote shares in excess of their collective net long position – in other words, to waive the right to vote shares that were borrowed or otherwise subject to an offsetting sale or delivery obligation.

I didn’t know you could do that by bylaw! Do similar requirements apply to incumbents (a la Kiani at Masimo?).

Second, Milbank recommends questionnaires…

There is always something new to discover.

For example, I was reviewing the CLC version (as one does), and I noticed that in the sections providing for stockholder approval (either for director-conflict transactions, or controller-conflict transactions), language was deleted that would specifically have required stockholders be informed as to the nature of a director’s conflict and involvement in the negotiation of the transaction, and the “material facts” of a controller transaction – though this language was retained for approval at the board/committee level. Though stockholder approval must still be “informed,” I rather suspect the deletions were intended to assist with future arguments that conflicts, or flawed “negotiations,” do not undermine the effect of a stockholder vote, when the stockholders were at least informed as to the material terms of the deal.

Screenshots of the relevant deletions, here:

And here:

This is, I believe, the language included in the version of the bill that passed the Delaware Senate.

In recent years, of course, the Delaware Supreme Court has rejected many attempts at stockholder ratification on the grounds that various conflicts or negotiating flaws were concealed from stockholders, and these were the grounds on which Chancellor McCormick concluded that the stockholder vote…

Assistant Professor of Business Law

9-Month Tenure-Track Position

The AACSB accredited College of Business at Louisiana State University Shreveport (LSUS) seeks applications for a tenure-track scholar position from qualified scholars at the rank of Assistant Professor of 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. Candidate will be expected to produce scholarship at a level consistent with our AACSB Scholarly Academic standards, 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 and be admitted to practice law by the highest court of at least one of the United States.  Candidates must demonstrate teaching excellence.

Preferred Qualifications: 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, copies of all transcripts that include relevant course work, and contact details of…

If the merger is completed, Celgene stockholders immediately prior to the completion of the merger will be entitled to receive $50.00 in cash, one share of Bristol-Myers Squibb common stock and one contingent value right (each, a “CVR”)