The Council of the Corporation Law Section of the Delaware State Bar Association recently released proposed amendments to the Delaware General Corporation Law. One such proposed amendment would add a new Section 115 to the Delaware General Corporation Law that would (a) permit a provision in either the certificate of incorporation or the bylaws requiring all “intracorporate claims” to be brought solely in a Delaware court and (b) prohibit a provision in either the certificate of incorporation or the bylaws precluding claims from being brought in a Delaware court. An “intracorporate claim” would be defined as a claim that either (i) is based on a violation of a duty by a current or former director, officer or stockholder in that capacity or (ii) comes under the jurisdiction of the Delaware Court of Chancery based on another provision of the Delaware General Corporation Law. The amendment is intended to reduce inefficiency and expenses related to litigating the same issue in multiple courts.
If adopted, this amendment would be effective on August 1, 2015. For corporate lawyers, the adoption of this amendment would mean not only a revision of standard forms of certificate of incorporation and bylaws, but also consideration on a per client basis as to whether an amendment to a company’s existing organizational documents should be and can be done. Of note is that the amendment only addresses a company’s organizational documents and would not preclude an exclusive non-Delaware forum provision to be contained in another agreement.