Delaware Legislature to Consider New Fee-Shifting Legislation
In April 29, 2015, Senator Bryan Townsend introduced legislation that would amend the Delaware General Corporation Law (DGCL) to ban fee-shifting bylaws for Delaware stock corporations (non-stock corporations would continue to be able to adopt fee-shifting bylaws). The bill, Senate Bill No. 75, would also confirm the Court of Chancery’s decision in Boilermakers Local 154 Retirement Fund v. Chevron Corp., 73 A.3d 934 (Del. Ch. 2013), by amending the DGCL to permit board-adopted bylaws designating Delaware as the exclusive forum for intra-corporate litigation. However, the bill would reject the Chancery Court’s decision in City of Providence v. First Citizens BancShares, Inc., 99 A.3d 229, 234 (Del. Ch. 2014), by prohibiting Delaware corporations from designating an exclusive forum other than Delaware for such claims.
As anticipated, the bill incorporates the amendments proposed by the Corporation Law Council this March. For more on that proposal, see “State Bar Council Proposes New Legislation for Delaware Fee-Shifting Ban and Delaware Court of Chancery Considers Fee-Shifting Bylaw.”
The bill has been assigned to the Delaware Senate Judiciary Committee.
We will continue to follow this legislation and keep you apprised of its status.