2015 Amendments to Delaware General Corporation Law Approved By General Assembly, Signed By Governor

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.