Corporate Litigation: Litigation Fee-Shifting Bylaws Facially Valid in Delaware
In his column on Corporate Litigation published in the New York Law Journal, Joseph M. McLaughlin writes about the Delaware Supreme Court's ruling last month that a board-approved provision in a non-stock corporation’s bylaws shifting legal expenses in intra-corporate litigation to unsuccessful claimants can be valid in Delaware. Although ATP Tour v. Deutscher Tennis Bund pertained to a non-stock corporation, the decision has provoked an outpouring of debate because its reasoning applies equally to stock corporations. This column examines this fluid situation and offers practical guidance to boards and their advisers.
Yafit Cohn, an associate at the Firm, assisted in the preparation of this article.