Dissolution amendments get first test

Article Abstract:

In re RegO Co gave the Delaware Court of Chancery the opportunity to apply Sections 280 to 282 of the General Corporation Law, which discuss the legal status of possible future claimants of a dissolved corporation. The RegO court determined that the claimants' trust could be structured as an appropriate mechanism to provide for possible future claims and approved an interim claim limit. The Delaware law also permits distributions when a corporation is dissolved and gives an elective dissolution procedure by which directors can eliminate future risk.

Management, Laws, regulations and rules, Finance, Corporations, Corporate finance, Debtor and creditor, Liquidation

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Delaware court clarifies duty to disclose

Article Abstract:

The Delaware Supreme Court ruled in Zirn v VLI Corp that all information a reasonable investor would deem important must be disclosed to stockholders during a tender offer or merger. The court also found that the attorney-client and work product privileges might be waived by partial disclosure of information claimed to be shielded by these privileges. Moreover, a corporate charter provision shielding directors from liability for breaches of fiduciary duty was deemed not to apply to a breach of their duty to disclose.

Disclosure (Securities law), Confidential communications, Attorney-client privilege

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Majority shareholders' duty is addressed

Article Abstract:

The Delaware Court of Chancery has held in three recent cases that majority shareholders who sell their position to outsiders do have a duty to protect the interests of other stockholders. The court has held that majority shareholders should exercise caution and care if a risk to minority holders' interests is posed by a sale.

Stockholders, Fiduciary duties

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