A landmark court decision in Delaware, known as the Moelis Decision, has cast a spotlight on the practice of granting significant authority to a company's financial backers through contracts, particularly in making core managerial decisions. This ruling, stemming from the Delaware Court of Chancery, is seen as a pivotal moment for corporate governance, especially for venture-backed startups and their drafting of shareholder rights provisions. Additionally, the decision has implications for voting formalities around merger agreements, as highlighted by recent litigation surrounding the DWAC vote over a merger with Trump Media. The court's stance on not issuing an injunction or holding a hearing on the merits of Patrick Orlando's lawsuit before the March 22 shareholder vote indicates a nuanced approach to balancing investor rights with managerial authority. This series of legal developments underscores the evolving landscape of corporate governance and the critical role of legal frameworks in shaping business practices.
Court has cleared path for vote on SPAC merger with Trump's media company https://t.co/w0lPBd5Ovl
DWAC says Delaware court has cleared path for March 22 vote on merger with Trump’s social-media company https://t.co/LEfk1SpfSs
So, in Moelis, VC Laster held that an individual investor cannot usurp a corporate board's managerial power via a private contract, but allowed for the possibility that limits could be built into the charter (via, for example, a class of preferred shares) https://t.co/b1CMajmF71
Delaware Court of Chancery Puts Practitioners on Notice Regarding Voting Formalities Around Merger Agreements https://t.co/NiVeC6pnWy #litigation #rules #delaware @JenGRodgers https://t.co/o6s8Te18CT
Update: Delaware Chancery Judge rules she will not issue any injunction or hold a hearing on the merits of Patrick Orlando's lawsuit prior to the March 22 shareholder vote over the Trump Media deal. Her ruling eliminates one potential obstacle to the DWAC vote https://t.co/JLeHZksd7H
Court Sticks Toe into the "Dismal Swamp" of Unincorporated Association Bylaws but Declines to Wade In https://t.co/I04QKIAexR #Litigation #California #Corporate @allenmatkins https://t.co/3NsPgs3vLN
Delaware Court of Chancery Puts Practitioners on Notice Regarding Voting Formalities Around Merger Agreements https://t.co/NiVeC6pnWy #litigation #rules #delaware @SheppardMullin https://t.co/SWlIJmUZlN
Maintaining the Balance of Power in Venture-Backed Startups: The Impact of Delaware’s Moelis Decision on Drafting Shareholder Rights Provisions https://t.co/ST9UDUji9S
A first-of-its-kind court decision involving investment bank Moelis & Co. threatens the growing corporate practice of giving a company’s financial backers significant authority, by contract, over core managerial decisions. https://t.co/lDd4BzI4sU
A first-of-its-kind court decision involving investment bank Moelis threatens the growing corporate practice of giving a company’s financial backers significant authority. https://t.co/EL5aDyEs7c