Delaware Chancery Court Enforces Statute Precluding Fee-Shifting Clause In Bylaws

Delaware Chancery Court Enforces Statute Precluding Fee-Shifting Clause In Bylaws

      In 2014, in response to efforts to include “fee-shifting” provisions in our corporate charters and bylaws, the Delaware Legislature, except with respect to nonprofit corporations, invalidated such provisions. In effect, while some companies had sought to shift liability for defense costs and derivative and similar actions, they were forbidden to do so. In a recent decision, the Delaware Chancery Court applied those new statutes. Solak v. Sarowitz, C.A. No. 12299-CV, 2016 WL 7468070 (Del. Ch. Dec. 27, 2016).

       HERE IS A LINK to a discussion of this decision.