Delaware's Top Five Worst Shareholder Decisions for 2009 (Introduction)

Its that time of year when we go back over the last twelve months and point out the decisions rendered by the various Delaware courts that were the most disadvantagous to shareholders.  We did this for 2007 and 2008.  We do not look for decisions where shareholders simply lost.  We look for decisions where the courts applied suspect reasoning that reflected a judicial predilection against shareholders and in favor of management.

In 2009, the choice for the top 5 worst decisions was difficult to narrow.  This was a year where the courts all but eliminated any ability to review decisions by the board to reject resignation letters when directors failed to received sufficient support under a majority vote provision.  It was a year where directors were all but told that they had no affirmative role in examination of systematic risk undertaken by their business, even when they formed an express committee to conduct that function.  Finally, it was a year where the court approved poison puts and did so by concluding that directors had no obligation to be made aware of contractual provisions that erode shareholder voting rights.

So, on with the countdown.

Comments

[Francis Pileggi]

Professor,
Best wishes for the New Year. As you know, in each of the last two years, I provided a respectful rebuttal to your "top 5 list" of Delaware cases. For 2008: http://www.delawarelitigation.com/2009/01/articles/commentary/top-5-delaware-cases-from-2008rebuttal-to-professor-brown/ and for 2007: http://www.delawarelitigation.com/2008/01/articles/chancery-court-updates/in-defense-of-delaware-corporate-law-opinions/ This year, however, without presenting it as a rebuttal, before I reviewed or replied to your list, I simply presented a "top 5 list" of key Delaware corporate cases for 2009: http://www.delawarelitigation.com/2009/12/articles/delaware-supreme-court-updates/top-5-corporate-and-commercial-cases-from-delaware-for-2009/

Best regards.