Oral History Documentary Videos on Landmark Developments in Delaware Corporate Law

Michael Wachter is the William B. and Mary Barb Johnson Professor of Law and Economics and Co-Director of the Institute for Law and Economics, at the University of Pennsylvania Law School; Lawrence A. Hamermesh is Executive Director, Institute for Law and Economics at the University of Pennsylvania Law School; and Nadia Jannetta is Managing Director at the Institute for Law and Economics at the University of Pennsylvania Law School. This post is part of the Delaware law series; links to other posts in the series are available here.

The Institute for Law and Economics (ILE) at the University of Pennsylvania Law School has released two new oral history documentary videos that offer unprecedented insight into some of the most pivotal developments in corporate law. One of the new videos tells the story of the famous Walt Disney shareholder derivative litigation challenging Michael Ovitz’s massive severance compensation. The other video details the gestation and birth of Section 102(b)(7) of the Delaware General Corporation Law, permitting corporations to eliminate monetary liability of directors for certain breaches of fiduciary duties.

The new videos are part of an ongoing ILE project to develop a website featuring in-depth interviews with the lawyers and judges who were at the center of the explosive evolution of Delaware corporate law. (For a brief video description of the project, visit https://www.youtube.com/watch?v=1YKJ10ikpE8&feature=youtu.be). The series of videos presents deep dives into the stories behind the Delaware court cases and legislation that have defined the modern era of corporate law, touching on issues like executive compensation, mergers and acquisitions, and corporate director liability.

Participants in the oral histories include some of the most influential figures in business and corporate law. In addition to former members of the Delaware judiciary (including former Chief Justices E. Norman Veasey and Myron Steele, and former Chancellor William T. Allen), the videos include interviews of the litigators and advisers who were at the epicenter of the groundbreaking legal developments explored in the videos.

The oral histories take viewers behind the scenes of landmark cases, ranging from mid-1980s Delaware Supreme Court and Chancery Court cases like Revlon, Inc. v. MacAndrews and Unocal Corp. v. Mesa Petroleum Co., which reshaped the responsibilities of directors of companies facing sales or hostile takeovers, to later decisions like In re Caremark International Inc. Derivative Litigation, which redefined directors’ duties of corporate oversight.

The new video about the Walt Disney shareholder derivative litigation explores a key case on executive compensation. That litigation generated landmark opinions such as the Delaware Supreme Court’s 2000 opinion in Brehm v. Eisner. The oral history includes interviews with judges, including former Chancellor William Chandler, whose opinions guided the outcome of the closely watched trial, as well as interviews with leading litigators in the case.

The oral histories also cover major legislative developments, like the development of Section 102(b)(7). The new documentary video on that subject explores the legislative response to a period of crisis in corporate law in the 1980s, when hostile takeovers ran rampant and corporate directors of target companies were exposed to millions of dollars in personal liability. To address these issues, a group of lawyers came together to draft Section 102(b)(7) of the Delaware Corporation Law, which changed the landscape of director liability and insurance by allowing corporations to insulate directors from paying damages for certain breaches of their fiduciary duties. Viewers will hear from the lawyers who drafted, debated, and promoted the adoption of the legislation, which has since made exculpatory clauses a standard feature of many corporate charters.

Available for viewing at http://www.delawarecorporatehistory.org/, the oral histories are accompanied by collections of contemporaneous documents (opinions, briefs, argument transcripts, legislative analyses, and the like) that provide important background for the discussion in the videos.

These oral histories are invaluable resources for both scholars and practicing attorneys. They have the potential to enrich classes in which these important legal developments are presented, deepen the understanding of their impacts, and guide future efforts to evaluate their significance.

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