Andy Garelick Speaks to Delaware Business Court Insider About Delaware Senate Bill 21
Munger, Tolles & Olson partner Andy Garelick was quoted in a recent article published by Delaware Business Court Insider titled, “Do Bright Lines Definitions in Delaware’s Corporate Law Amendments Afford a ‘Clear Playbook’ or Place Chancery in ‘Straitjacket’?”
The article discusses Delaware Senate Bill 21 and its proposed amendments to Section 144 of the Delaware General Corporation Law. The bill, which is currently before the House Judiciary Committee, seeks to provide Delaware corporations and their boards of directors clearer statutory guidance to navigate, among other matters, transactions with insiders and controlling stockholders. Importantly, the proposed amendments include various definitions and procedural safe harbors which, if properly observed, can cleanse a transaction from application of the entireness fairness standard of judicial review.
Andy, who specializes in advising boards and board committees on governance matters, noted that it is not unprecedented for the Delaware legislature to take action in response to chancery court decisions that are (or are perceived to be) unfriendly to Delaware corporations or their fiduciaries.
“In this case, what the legislature seeks to do is to provide boards of Delaware corporations with a much more clear playbook on how to approach transactions with insiders and controlling stockholders,” Andy said.