January 28, 2022

Volume XII, Number 28

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January 28, 2022

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January 25, 2022

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Delaware Special Litigation Committee Review “Could Stand A Good Tweaking”

UCLA Law School Professor Stephen Bainbridge recently critiqued the Nevada Supreme Court’s decision to follow Auerbach v. Bennett, 419 N.Y.S.2d 920 (1979) rather than Delaware’s Zapata Corp. v. Maldonado, 430 A.2d 779 (Del. 1981).  He concludes:

To be sure, Delaware law in this area could stand a good tweaking. The Aronson/Zapata framework continues to rely unduly on bizarrely worded standards that often fail to grapple with the real issue. The Delaware courts would do well to adopt a simpler standard, which asks whether the board of directors is so clearly disabled by conflicted interests that its judgment cannot be trusted.  If so, the shareholder should be allowed to sue. If not, the shareholder should not.

Footnote omitted.  For more on Nevada and California’s embrace of Auerbach, see:

Nevada Favors New York Over Delaware Precedent For SLC Review

Review Of Special Litigation Committee Recommendations

Does California Side With Delaware Or New York On Special Litigation Committee Reviews?

Las Vegas Shooting Tragedy

I grew up in Las Vegas, Nevada.  When I went East for school, I soon tired of the incessant comment “I didn’t know anybody lived in Las Vegas”.  Yes, real people live real lives there.  My prayers are with those Las Vegans and visitors now enduring the unimaginable agony of the loss of family and friends.  Official information regarding the tragedy is available here.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume VII, Number 276
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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...

949-851-5428
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