Roger A. Cooper

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The following is part of our annual publication Selected Issues for Boards of Directors in 2026. Explore all topics or download the PDF.

Two significant developments during 2025—one in Delaware corporate law and the other in federal securities law—could materially impact shareholder litigation in 2026 and beyond. In March 2025, following a number of controversial Delaware Court of Chancery decisions, the Delaware legislature passed S.B. 21, establishing safe harbors from litigation for certain board decisions and transactions that might otherwise be evaluated under the demanding entire fairness standard of review. Then, in September 2025, the SEC issued guidance permitting for the first time U.S. listed companies to include mandatory arbitration provisions in their bylaws or charter for federal securities law claims. S.B. 21 currently faces a constitutional challenge before the Delaware Supreme Court, and because Delaware law prohibits corporations from requiring investors to arbitrate securities claims, any Delaware corporation adopting mandatory arbitration will likely face legal challenges. While each of these developments have the potential to significantly change the legal landscape for Delaware and listed companies, their full impact remains uncertain and will likely gradually come into focus in 2026.Continue Reading A Sea Change In Shareholder Litigation, or More Of The Same? What To Expect In 2026

On September 17, 2025, the Securities and Exchange Commission (the Commission) voted 3-1 to issue a policy statement clarifying that the presence of a mandatory arbitration provision for investor claims arising under the federal securities laws in an issuer’s articles or certificate of incorporation, bylaws or any securities-related contractual agreements (Operating Documents) will not affect the Commission’s decision whether to accelerate the effectiveness of that issuer’s registration statement.[1] The statement marks a reversal of the Commission’s longstanding refusal to accelerate an issuer’s registration statement under these circumstances,[2] a position that has resulted in U.S. public companies generally not including mandatory arbitration provisions for federal securities law claims in their Operating Documents. As a result, these claims can and have historically been filed as class actions in federal courts.Continue Reading To Arbitrate or Not to Arbitrate: The SEC Now Allows Companies to Choose

The following is part of our annual publication Selected Issues for Boards of Directors in 2025. Explore all topics or download the PDF.

2024 was a remarkable year in Delaware. For the first time in as long as anyone can remember, people began to seriously question whether Delaware would retain its dominance as the go-to jurisdiction for incorporating companies. There was an uproar following several decisions by the Delaware Court of Chancery that seemed to shake the market’s confidence in Delaware law’s venerable predictability. One such decision invalidated shareholder agreement provisions that had long been commonplace and another found that a board had not validly approved a merger agreement because, as is typical, the board had not received a draft in final form. At the same time, a certain well-known CEO’s $50 billion compensation package was struck down, leading him to publicly declare “Never incorporate your company in the state of Delaware.”Continue Reading Delaware’s Rocky Year–What Lies Ahead?

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

In 2023, Delaware courts continued to vigorously apply Caremark’s duty of oversight in cases involving corporate misconduct, expressly recognizing for the first time that such claims can be brought against officers in addition to directors.  While a Caremark claim does not necessarily require illegal conduct, Delaware courts continue to make clear that knowing inaction when confronted with illegal conduct is often enough to satisfy its bad faith requirement. This emphasis on bad faith and misconduct may suggest a more functional approach to Caremark claims by Delaware courts, and a departure from the more formal categories of Caremark claims that Delaware courts relied on in the past.  At the same time, we saw Delaware courts sidestep hot-button issues related to corporate political advocacy and defer to the business judgment of boards in order to navigate those sometimes controversial issues.  Finally, we ended 2023 with an uncertain understanding of the scope of MFW review, which has expanded beyond the squeeze-out context in recent years.  The Delaware Supreme Court is currently considering whether to cut back on such “MFW creep.”Continue Reading Delaware Courts Beef Up Caremark Claims Involving Corporate Misconduct While Leaving Hot-Button Political and ESG Issues to the Boardroom

Much has been written lately about a circuit split on the question whether a company’s forum selection bylaw mandating shareholder derivative lawsuits be brought in Delaware state court trumps a federal lawsuit asserting a derivative claim under Section 14(a) of the Securities Exchange Act of 1934 (which can only be asserted – if at all – in federal court).  The Seventh Circuit answered this question “no”[1] while the Ninth Circuit sitting en banc answered “yes,”[2] in both cases over vigorous dissents.  Many have speculated that the U.S. Supreme Court may weigh in to resolve this clear circuit split.Continue Reading Bringing an End to “Derivative” Section 14(a) Claims – Without Waiting for the Supreme Court to Weigh In

The Delaware legislature recently amended Delaware’s General Corporation Law (DGCL) to allow corporations to limit the personal liability of corporate officers for money damages for breaches of their fiduciary duty of care. Prior to this amendment, Delaware only allowed for such “exculpation clauses”—which must be set forth in the certificate of incorporation—for corporate directors.
Continue Reading Delaware Extends Exculpation from Personal Liability to Senior Officers

In Stoyas v. Toshiba Corp., a securities class action that has produced a number of notable decisions about the application of the federal securities laws to unsponsored ADRs, the Ninth Circuit recently declined to review the district court’s ruling denying to certify a class.  In doing so, the Ninth Circuit let stand the district court’s novel ruling, which found the relevant named plaintiff to be an atypical class representative after determining that it had purchased the unsponsored ADRs in foreign transactions.[1]
Continue Reading Ninth Circuit Denies Class Cert Appeal in Toshiba Securities Litigation Concerning Unsponsored ADRs

In September 2021, the Delaware Supreme Court in United Food and Commercial Workers Union v. Zuckerberg revamped the test for pleading “demand futility” in shareholder derivative suits for the first time in decades. At the same time, the court’s decision reinforces Delaware courts’ increasing focus on the independence of directors, not only when the board is sued in a shareholder derivative action but also in other conflict situations in which independent directors are called on to exercise their business judgment on behalf of the company.
Continue Reading The Delaware Courts’ Evolving View of Director Independence

In Snow Phipps v. KCAKE Acquisition, the Delaware Court of Chancery ordered the buyer (Kohlberg) to close on its $550 million agreement to purchase DecoPac, a cake decorations supplier.  In doing so, the court easily rejected the buyer’s claims that the COVID-19 pandemic resulted in a material adverse effect (“MAE”) and that the steps…

On February 26, 2021, the Delaware Court of Chancery (McCormick, V.C.) issued a memorandum opinion in The Williams Companies Stockholder Litigation enjoining a “poison pill” stockholder rights plan adopted by The Williams Companies, Inc. (“Williams”) in the wake of extreme stock price volatility driven by the double whammy of COVID-19 and the Russia-Saudi Arabia oil…