Claudia H. Allen is chair of the Corporate Governance Practice Group at Neal, Gerber & Eisenberg LLP. This post discusses a study by Ms. Allen, available here. This post is part of the Delaware law series, which is co-sponsored by the Forum and Corporation Service Company; links to other posts in the series are available here.
In response to concerns that the plaintiffs’ bar is rushing [1] to sue Delaware corporations “anywhere but Delaware,” to avoid the predictability and speed of Delaware courts and potentially to obtain larger settlements, 195 Delaware corporations (including Chevron, DIRECTV, Life Technologies and 24 other members of the S&P 500) have adopted or proposed adopting charter or bylaw provisions requiring that derivative actions, fiduciary duty claims and other intra-corporate disputes be litigated exclusively in the Delaware Court of Chancery. Among other things, these provisions seek to address the phenomenon of Delaware corporations facing parallel, competing litigation in Delaware and another state or in federal court, [2] often in connection with M & A activity. The January 2012 edition of my Study of Delaware Forum Selection in Charters and Bylaws analyzes these provisions and the trends they reveal.