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Articles

Shareholder plaintiffs withdraw appeal; exclusive forum selection bylaws are enforceable

October 18, 2013

Articles

Shareholder plaintiffs withdraw appeal; exclusive forum selection bylaws are enforceable

October 18, 2013

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Earlier this week, the Plaintiffs voluntarily dismissed their highly-anticipated appeal to the Delaware Supreme Court of a decision by the Court of Chancery upholding company bylaws that require lawsuits challenging the internal affairs of the corporation to be brought in the state of incorporation (“Forum Selection Bylaws”). Therefore, the Chancellor Strine’s opinion in Boilermakers Local 154 Retirement Fund, et al. v. Chevron Corp., et al., 2013 WL 3191981 (Del. Oct. 15, 2013) is the final authority on this topic for now. Plaintiffs likely dismissed their claims because it is very likely that Chancellor Strine’s opinion would have been affirmed. Without a decision on this topic from Delaware’s highest court, there is still a sliver of daylight for plaintiffs to make an uphill argument—in cases brought outside of Delaware—that Forum Selection Bylaws adopted under Delaware law are unenforceable because the state’s highest court has not yet opined on the subject.

 


The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.
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