Francis Pileggi Speaks With Delaware Business Court Insider About Changes to Shareholder Voting Requirements

Wilmington, Del. (August 14, 2023) – Wilmington Managing Partner Francis G.X. Pileggi recently spoke with the Delaware Business Court Insider (part of Law.com) for an article titled, “New Shareholder Voting Requirements Could Offer Corporations Litigation Buffer,” which discusses changes to the Delaware General Corporation Law that went into effect on August 1, 2023.

As the DBCI article describes, this year’s notable amendments reduce the need for shareholder votes on certain corporate issues. For example, a majority of all outstanding shares is no longer needed to initiate a reverse stock split or to increase or decrease the number of outstanding shares for a public company. Now, only a majority of the shares that are present and cast a vote is required. Moreover, a shareholder vote is no longer required at all for a forward stock split. In addition, the recent amendments to the Delaware General Corporation Law simplify the procedure for validating ratifications and defective acts under Section 204.

In commenting on how the recent changes to the law may impact the prevalence of shareholder litigation, Mr. Pileggi told DBCI, “Some streamlining was in order to deal with the practical obstacles that arose when relatively new statutes were implemented, such as Section 204. . . . To that extent, many of these amendments should reduce the litigation of issues that are now clarified or resolved by the amendments.”

Mr. Pileggi is a member of Lewis Brisbois’ Complex Business & Commercial Litigation Practice. He focuses primarily on high-stakes disputes of corporations, stockholders, members of boards of directors, members and managers of LLCs, and those with managerial or ownership interests in other forms of entities. In addition, since 2004, Mr. Pileggi has maintained the Delaware Corporate & Commercial Litigation Blog, at www.delawarelitigation.com, in which he analyzes key corporate and commercial decisions from Delaware's Supreme Court and Court of Chancery.

Read the full DBCI article here (subscription may be required).