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- Articles of incorporation; certificate of incorporation; charter; bylaws; Delaware; English rule; American rule; fee-shifting; fee-shifting provision; frivolous litigation; internal corporate claims; Section 102(f); Section 109(b); shareholder derivative suit; ATP Tour (1)
- Inc. v. Deutscher Tennis Bund (1)
- Mutual fund; derivate suit; direct suit; demand; Northstar Financial Advisors Inc. (1)
- V. Schwab Investments; independent directors (1)
Articles 1 - 2 of 2
Full-Text Articles in Law
Delaware’S Ban On Fee-Shifting: A Failed Attempt To Protect Shareholders At The Expense Of Officers And Directors Of Public Corporations, Ryan S. Starstrom
Delaware’S Ban On Fee-Shifting: A Failed Attempt To Protect Shareholders At The Expense Of Officers And Directors Of Public Corporations, Ryan S. Starstrom
Brooklyn Law Review
In 2014, the Delaware Supreme Court issued its opinion in ATP Tour, Inc. v. Deutscher Tennis Bund, which held that non-stock Delaware corporations may validly enact fee-shifting provisions in their bylaws and certificate of incorporation. Subsequently, the Delaware Legislature, fearing that the ATP Tour decision would extend to stock corporations, amended Title 8 of the Delaware Code (DGCL) Sections 102(f) and 109(b). These amendments provide for a blanket prohibition of fee-shifting provisions in a Delaware corporation’s certificate of incorporation or bylaws, respectively, in regard to “internal corporate claims.” Such a prohibition eliminates the possibility for a Delaware corporation to enact …
An Exception To The Derivative Rule: Allowing Mutual Fund Investors To Bring Suits Directly, Jamie D. Kurtz
An Exception To The Derivative Rule: Allowing Mutual Fund Investors To Bring Suits Directly, Jamie D. Kurtz
Brooklyn Law Review
Mutual funds differ greatly from traditional corporations in the way they are formed and operated. Despite these differences, courts apply the same rules for derivative shareholder litigation to both types of entities. While these rules make sense and were mostly created with corporations in mind, courts have generally been unwilling to consider mutual funds’ unique characteristics in determining whether to allow direct litigation from shareholders. This note explores those unique characteristics and the usual policy reasons for requiring derivative litigation. It concludes that in most cases these unique characteristics make a derivative suit nearly impossible to sustain. Further, the normal …