January 25, 2022

Volume XII, Number 25

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January 25, 2022

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January 24, 2022

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Delaware, Consent, And The Adequacy Of Email Notice

Since the turn of this century, Delaware has allowed corporations to give notices to stockholders by electronic transmission.  8 Del. Code § 232(a).  However, the statute is conditioned upon the stockholder's consent.  California has a similar consent requirement in Corporations Code § 20.  Delaware is now proposing to amend Section 232 to permit a corporation to give notice by electronic mail unless the stockholder has objected.  See Senate Bill No. 88.  The bill would also define "electronic mail" for the first time.

As I was pondering these changes, I came across the following observations about the adequacy of email notifications penned by the estimable and eminently quotable Justice William W. Bedsworth of the California Court of Appeal:

"Email has many things to recommend it; reliability is not one of them. Between the ease of mistaken address on the sender’s end and the arcane vagaries of spam filters on the recipient’s end, email is ill-suited for a communication on which a million dollar lawsuit may hinge.  A busy calendar, an overfull in-box, a careless autocorrect, even a clumsy keystroke resulting in a 'delete' command can result in a speedy communication being merely a failed one."

Lasalle v. Vogel, 2019 Cal. App. LEXIS 533 (footnote omitted).  Justice Bedsworth's comments were directed to the adequacy of email notice before taking a default judgment and not the Delaware bill.  Nonetheless, his concerns about the adequacy of email are entirely apposite to stockholder notice.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume IX, Number 163
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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