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February 18, 2025

In a post yesterday, I discussed my preliminary reactions to Delaware SB 21, which will modify Delaware’s rules governing conflicted controller transactions. The changes being made are largely consistent with the changes I proposed in my article, A Course

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ProfessorBainbridge.com

Preliminary Reaction to Delaware SB 21 and Comparison to the Proposals I Made in A Course Correction for Conflicted Controller Transactions

By Stephen M. Bainbridge

February 17, 2025

In my article, A Course Correction for Controlling Shareholder Transactions, available at SSRN: https://ssrn.com/abstract=5022685, I argue that Delaware courts increasingly exhibit a reflexive suspicion of transactions involving a controlling shareholder. The court has operationalized that skepticism by notably broadening

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ProfessorBainbridge.com

Rethinking Rule 14a-8: A Case for Repeal or Meaningful Reform of the Shareholder Proposal Rule

By Stephen M. Bainbridge

February 16, 2025

The shareholder proposal rule, Securities Exchange Act Rule 14a-8, has long been heralded as a democratizing tool in corporate governance, allowing shareholders to voice their concerns through inclusion in company proxy materials. While well-intentioned, Rule 14a-8 is no longer fit

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ProfessorBainbridge.com

A critique of SEC Commissioner Caroline Crenshaw’s statement opposing Staff Bulletin 14M and defending the broken shareholder proposal regime

By Stephen M. Bainbridge

February 16, 2025

Predictably, Democratic SEC Commissioner Caroline Crenshaw opposed the important and timely SEC Staff Bulletin updating the way the SEC applies the economic significance and ordinary business exclusions to the shareholder proposal rule. I discussed the new bulletin in the prior

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ProfessorBainbridge.com

Acting SEC Chair puts long needed limits on shareholder activism via proposals

By Stephen M. Bainbridge

February 16, 2025

Last week the SEC issued Staff Legal Bulletin No. 14M. It makes some key changes in how the SEC will apply the shareholder proposal rule during the current proxy season. In brief, the shareholder proposal rule (SEC Rule 14a-8)

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ProfessorBainbridge.com

Corporate Directors Can’t Change the Rules in the Middle of the Game

By Stephen M. Bainbridge

February 9, 2025

Ann Lipton reports on an interetsing new case: Daktronics is incorporated in South Dakota of all places (is it lonely there?). South Dakota mandates cumulative voting, which makes it much, much easier for a minority blockholder to gain board representation,

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ProfessorBainbridge.com

DExit Civil War? The Governor and Legislative Leaders Fire Shots Across Chancery’s Bow

By Stephen M. Bainbridge

February 5, 2025

Regular readers know that I have been covering the DExit phenomenon. My article DExit Drivers: Is Delaware’s Dominance Threatened?, which is forthcoming in the Journal of Corporation Law, provides empirical data on reincorporations out of Delaware. I concluded that

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ProfessorBainbridge.com

Delaware Supreme Court Decides TripAdvisor Case: DExit Governed by the Business Judgment Rule Rather Than Entire Fairness: Compared to my Proposed Course Correction

By Stephen M. Bainbridge

February 4, 2025

In a significant ruling, the Delaware Supreme Court addressed when a controlling shareholder’s actions trigger heightened scrutiny under Delaware corporate law. Maffei v. Palkon, CA No. 2023-0449-JTL (Del. Feb. 4, 2025), available at: https://courts.delaware.gov/Opinions/Download.aspx?id=374990. Facts The case involved Gregory

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ProfessorBainbridge.com

Chief Justice Seitz’s Defense of Delaware Corporate Law Misses the Point

By Stephen M. Bainbridge

February 4, 2025

In a presentation to the PLI Twenty-Second Annual Directors’ Institute on Corporate Governance, Delaware Chief Justice Collins Seitz offers a mostly sensible defense of Delaware corporate law and Delaware’s preeminent position in the market for corporate charters. But then he

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ProfessorBainbridge.com

DEXIT News: Will Meta Follow Tesla to Texas?

By Stephen M. Bainbridge

January 31, 2025

The WSJ reports: Meta Platforms is discussing moving its incorporation from Delaware, where most big U.S. companies are legally housed, people familiar with the matter said. Texas has billed itself as a better destination for companies such as Meta

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