Amendments to Delaware’s General Corporation Law Offer Statutory Guidance Regarding Stockholder Agreements
Highlights
On July 17, 2024, Senate Bill 313, which amended Delaware’s General Corporation Law (the “DGCL”), was signed into law and will be incorporated into the DGCL.
The amendments are prospective and retroactive and take effect on August 1, 2024, and will apply to contracts, agreements, instruments, or documents whether or not the contracts, agreements, instruments, or documents were made, approved, or entered into on or before August 1, 2024.
These amendments address some of the potential ramifications created by decisions of the Delaware Court of Chancery, including West Palm Beach Firefighters’ Pension Fund v. Moelis & Co.
On July 17, 2024, Senate Bill 313, which amended Delaware’s General Corporation Law (the “DGCL”), was signed into law by Delaware Governor John Carney, and will be incorporated into the DGCL. The amendments (among other things) inserted Section 122(18) into the DGCL, which sets forth certain types of provisions that may be included in contracts made by a corporation, and all agreements, instruments, or documents that may be approved by the board of directors (which includes merger and consolidation agreements) entered into by a corporation. The amendments are prospective and retroactive and take effect on August 1, 2024, applying to the contract, agreement, instrument, or document whether or not the contract, agreement, instrument, or document is made, approved, or entered into on or before August 1, 2024. The amendments, however, will not apply to or affect any civil action or proceeding completed or pending on or before August 1, 2024. The law predating the amendments will apply to such civil action or proceeding.
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