On May 8, 2014, the Delaware Supreme Court issued an en banc response to certified questions of law from the U.S. District Court for the District of Delaware, in which the Supreme Court held that a “fee shifting” bylaw provision in a non-stock corporation’s bylaws “can be valid and enforceable under Delaware law.” ATP Tour, Inc. v. Deutscher Tennis Bund (German Tennis Federation), et al., No. 534, 2013 (Del. May 8, 2014). The bylaw at issue would shift the company’s defense fees and costs to a member who had sued the company (or any other member) and was unsuccessful in “substantially achiev[ing], in substance and amount, the full remedy sought” in the litigation.
Continue reading ““Fee-Shifting” Bylaws–A New Tool to Stem the Tide of Shareholder Litigation?”