June 16, 2021

Volume XI, Number 167

Advertisement

June 15, 2021

Subscribe to Latest Legal News and Analysis

June 14, 2021

Subscribe to Latest Legal News and Analysis

You Won't Find This "Bedrock" Delaware Doctrine In California Case Law (At Least Not Yet)

In Orzeck v. Englehart, 195 A.2d  375 (Del. 1963), the Delaware Supreme Court adopted what the Court of Chancery subsequently described as a "bedrock" doctrine of Delaware corporate law - the "Doctrine of Independent Legal Significance".   Warner Communications Inc. v. Chris-Craft Indus., Inc., 583 A.2d 962, 970 (Del. Ch.), aff’d, 567 A.2d 419 (Del. 1989).   The Delaware high court defined the doctrine as being applied as follows:

action taken under one section of that law is legally independent, and its validity is not dependent upon, nor to be tested by the requirements of other unrelated sections under which the same final result might be attained by different means.

Despite the doctrine's bedrock status in Delaware, I have been unable to find a single published opinion of a California appellate court that adopts the doctrine.  Failure to recognize the doctrine of independent legal significance introduces a "wild card" element to corporate planning by creating uncertainty as to whether the form of a transaction will be recognized. 

For more on Delaware's doctrine of independent legal significance, see this Business Lawyer article by C. Stephen Bigler and Blake Rohrbacher.  

© 2010-2021 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XI, Number 160
Advertisement
Advertisement
Advertisement

TRENDING LEGAL ANALYSIS

Advertisement
Advertisement
Advertisement

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
Advertisement
Advertisement