The Board in Charge

Corporate partner Doug Raymond authored an article for Directors & Boards on how market practice recently ran into the limitations of the Delaware law in an opinion from the Delaware Chancery Court.

Raymond explained that the Delaware State Bar Association proposed an amendment to Delaware law that would validate many of the provisions that the court had found improper, and it is likely that an amendment to this effect will be adopted later in 2024.

Raymond also noted that boards with approved arrangements similar to those invalidated in the Delaware case should pay close attention to the proposed legislative fix as it moves through the Delaware General Assembly. He added that venture capitalists, activists and other investors should carefully consider their existing agreements and future protocols in light of this decision.