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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
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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 …