Corporate Attorneys Brace for Impact of New Delaware Board Law

Delaware’s new corporate law amendments taking effect Thursday reinforce common practices vulnerable to litigation, after a landmark court order invalidating a billionaire founder’s veto rights over board decisions, corporate attorneys say.

Companies can now use private contracts to grant stockholders the types of control that previously required a charter provision or a special class of stock. The state bar committee that drafted the amendments in response to a Feb. 23 Chancery Court decision invalidating extensive veto rights in a pact between Moelis & Co. and its founder called them a “routine” update by the state that effectively writes the rules ...