On June 24, 2015, Delaware Governor Jack Markell signed into law several important amendments to the Delaware General Corporation Law. Key amendments are as follows:
Fee Shifting Provisions Prohibited.
Sections 102 and 109 have been amended to prohibit “fee shifting” provisions in certificates of incorporation and bylaws of stock corporations. The amendment is a response to the Delaware Supreme Court’s ruling in ATP Tour, Inc. v. Deutscher Tennis Bund, 91 A.3d 554 (Del. 2014), in which the Court held that a bylaw making members of corporation liable for the corporation’s legal expenses in certain intra-corporate disputes was facially valid.
A new Section 102(f) provides that a certificate of incorporation may not contain any provision imposing liability on a stockholder for the attorneys’ fees or expenses of the corporation or any other party in connection with an internal corporate claim. The legislation adds a similar provision to Section 109(b) of the DGCL, prohibiting fee shifting provision in corporate bylaws.