Delaware Companies Can Push Securities Suits to Federal Court (1)

March 18, 2020, 5:19 PMUpdated: March 18, 2020, 9:50 PM

Delaware corporations can adopt charter provisions requiring securities claims to be brought in federal court, the state’s top court ruled for the first time, potentially opening the door for companies to add wide-ranging restrictions to their charters and bylaws.

The ruling Wednesday reverses a Chancery Court decision in favor of Matthew Sciabaccuchi, who holds shares in Blue Apron Holding Inc., Stitch Fix Inc., and Roku Inc. All three companies added a “federal forum provision” (FFP) to their charters before going public in 2017.

“It’s a consequential, momentous, even historic opinion,” Francis G.X. Pileggi of Eckert Seamans Cherin & Mellott LLC ...

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