http://blogs.law.widener.edu/delcorp

Random Thoughts on Proxy Access and Judicial Review

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sclaesOfJusticeDarkLawrence A. Hamermesh
Ruby R. Vale Professor of Corporate and Business Law
Widener University School of Law, Wilmington, Delaware

On July 22, while I was vacationing and enjoying relatively cool temperatures in northern Maine, the District of Columbia Court of Appeals, suffering in Washington’s heat and humidity, issued an opinion invalidating Rule 14a-11, which the Securities and Exchange Commission had adopted about a year earlier.

Now that I’m back in the office and have had a chance to reflect on the Court of Appeals’ opinion, I can only begin to describe how mixed my feelings are on this whole subject.  On one hand, I was involved with the preparation of the rule while employed with the Commission Read the rest of this entry »

Amylin Pharmaceuticals and a Substantive Duty of Care?

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San Antonio Fire & Police Pension Fund v. Amylin Pharm., Inc., 2009 WL 3182602 (Del.).

In the trial below, the plaintiffs claimed, among other issues, that the board violated their fiduciary duty of care because they were not explicitly aware of the proxy puts when they approved the Indenture and credit agreements. The board had retained highly-qualified counsel and asked if there was anything “unusual or not customary” in the terms of the agreement.  It was told there was not.  The Proxy Puts exposed the Company to immediate repayment and repurchase obligations if Amylin shareholders elected a board of directors that did not include a majority of the incumbent directors, or directors approved by the incumbent directors.  These obligations could have required Amylin to remit more than $900 million – an amount exceeding the Company’s available cash. Read the rest of this entry »

Bainbridge on Fiduciary Duties and Preferred Stockholders

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The Court of Chancery’s recent decision in In Re: Trados Incorporated Shareholder Litigation, No. 1512-CC, 2009 WL 2225958 (July 24, 2009) prompted Professor Bainbridge to question the basic issue of whether there ought to be fiduciary duties to preferred stock holders at all   Professor Bainbridge gives a brief overview of this area of Delaware corporate law and concludes that Jedwab v. MGM Grand Hotels, Inc., 509 A.2d 584 (Del. Ch. 1986) should be overturned on both doctrinal and policy grounds.

For the full commentary see the post on his blog.

Lyondell Explained

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Along with Edward Welch and Rachel Barnett, Widener alum and Skadden Arps
partner Edward Micheletti published an article in the M&A Lawyer May 2009
issue discussing five important takeaways from the Delaware Supreme Court’s opinion in Lyondell v. Jacobs.

The article can be viewed here.