Moelis Claims Invalidated Pact Was Always Legal in Delaware Law

The extensive veto rights in Moelis & Co.’s pact with its billionaire founder that were invalidated by the Delaware Chancery Court have always been permissible, the investment bank told the state’s top appeals court.

Swift legislative action to amend Delaware’s statutes to explicitly allow similar provisions supports the bank’s argument that agreements like the one made with Ken Moelis in 2014 have always been allowed under the state’s corporate laws, the company said in a brief posted late Wednesday. The Delaware Supreme Court has the chance to establish precedent with its decision.

“It would defy common sense to conclude that ...