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

The M&A Environment in 2024

Global deal value in 2023 fell to the lowest level seen in a decade. It was the first year since 2013 that the M&A market failed to hit the $3 trillion value mark, with continued reduced deal activity from private equity firms, which spent 36% less on acquisitions than in 2022. For boards and management teams pondering the M&A environment in 2024, a complex mix of macroeconomic, geopolitical and sector-specific headwinds and tailwinds make prognostication difficult.Continue Reading Outlook for M&A and Shareholder Activism in 2024

As 2024 gets off to a busy start, companies, boards and management teams are facing a host of new and developing business issues and a large array of regulatory developments, from new and growing risks and opportunities from the adoption of artificial intelligence, to ever-changing ESG issues and backlash, as well as enhanced focus on government enforcement and review. As has become a tradition, we have asked our colleagues from around our firm to boil down those issues in their fields that boards of directors and senior management of public companies will be facing in the coming year, yielding focused updates in eighteen topics that will surely feature at the top of board agendas throughout the year.Continue Reading Selected Issues for Boards of Directors in 2024

In a recent decision, the Delaware Court of Chancery grappled with the question whether—and to what extent—claims for breach of fiduciary duty can be waived ex ante in a corporate shareholder agreement.  Specifically, in New Enterprise Associates 14 LP v. Rich, the court denied a motion to dismiss claims for breach of fiduciary duties brought against directors and controlling stockholders of Fugue, Inc. (the “Company”) by sophisticated private fund investors who had agreed to an express waiver of the right to bring such claims.[1]  Importantly, the court found that fiduciary duties in a corporation can be tailored by parties to a shareholders agreement who are sophisticated, and were validly waived by the voting agreement in this case (which specifically addressed the type of transaction at issue).  The court, however, held that public policy prohibits contracts from insulating directors or controlling stockholders from tort or fiduciary liability in a case of intentional wrongdoing, which the court found was plausibly alleged in this case. The court’s opinion has implications for sophisticated investors in venture capital and other private transactions involving Delaware corporations. The opinion cautions against overreliance on express contractual waivers, on the one hand, while also serves as a reminder that at least in some circumstances sophisticated parties can contract around default legal principles (including fiduciary duties), even with respect to corporations.Continue Reading Delaware Chancery Court Highlights Tension Between Freedom of Contract and Corporate Fiduciary Duties

On May 1, 2023, the Delaware Court of Chancery addressed an unsettled question under Delaware law—whether a fully informed, uncoerced vote of disinterested stockholders (so-called “Corwin cleansing”[1]) can be applied to defeat claims to enjoin defensive measures under Unocal Corp. v. Mesa Petroleum Co.Continue Reading Corwin Cleansing Denied In Action For Post-Closing Injunctive Relief Under Unocal

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2023”.

Over the past year, public companies have faced an onslaught of external pressures, including an uncertain economy, an ongoing pandemic with changing rules and best practices and increasing demands from various stakeholders.

Shareholder activism continued to rise in 2022, and is poised to bubble over in 2023. As we turn the page on 2022, the overall macroeconomic and geopolitical picture portends continued market volatility and recessionary-like conditions, and activists of all stripes will look to capitalize on valuation re-sets and broader disruption to push their agendas at companies at home and abroad.
Continue Reading Outlook for Activism in 2023

We have once again asked our colleagues from around our firm to boil down the issues in their fields that boards of directors and senior management of public companies will be facing in the coming year. In the following pages, we present the results for 2023 – focused updates on 18 topics that will surely feature at the top of board agendas throughout the year.Continue Reading Selected Issues for Boards of Directors in 2023

On February 10, 2022, the Securities and Exchange Commission (the “SEC”) issued for public comment proposed rules that will, if adopted, significantly affect how investors report their beneficial ownership on Schedules 13D and 13G. The principal changes would:

  • accelerate the filing deadlines for Schedules 13D and 13G beneficial ownership reports;
  • clarify the circumstances under which

In many ways, 2021 was a high-water mark for corporate activism. The levels of traditional shareholder activism rebounded from the lows reached during the early days of the COVID-19 pandemic. M&A activism increased substantially as shareholder activists sought to capitalize on the M&A boom. Large-cap activism returned as activists targeted Fortune 500 CEOs with increasing frequency. The year also saw the emergence of a new brand of ESG-themed shareholder activism in the wake of the Engine No. 1 activist campaign supported by CalPERS at ExxonMobil and the copycat ESG tactics deployed by other shareholder activists.
Continue Reading Navigating a World Where Almost Everyone Is an Activist

Robust interest in ESG-related matters and growing demands from shareholders, regulators and various other stakeholders during 2021 have put management and boards of public companies firmly on notice that strong ESG policies, practices and commitments are key components to long-term organizational success, business resiliency and value creation.
Continue Reading Key Practices for Board Organization and Oversight of ESG