Exploring New Approaches to Unsettled Legal Questions

Tag: Ruby R. Vale Interschool Corporate Competition

The Future of Dead-Hand Proxy Puts in Delaware: Alive and Well or Dead on Arrival?

by Caitlin Millat*

Does a board of directors’ power to direct a corporation allow it to tie its own hands in the course of negotiating debt agreements? In this Contribution, Caitlin Millat (’18) analyzes the problem of dead-hand proxy puts under Delaware law, considering whether these provisions are ever allowed, and if they are, under what standard of scrutiny they should be reviewed. This contribution argues that dead-hand proxy put provisions should be evaluated under the business judgment rule, not the Unocal enhanced scrutiny standard.

Challenging USACafes Liability of a Fiduciary Entity’s Controllers

by Natalie Noble*

Should a board of directors of a parent company owe fiduciary duties not just to its shareholders, but also to the shareholders of companies involved in limited partnerships with one of its subsidiaries? In this Contribution, Natalie Noble (’18) discusses the implications of In re USACafes, L.P. Litigation, in which the Delaware Chancery Court held that the board of directors of a corporation engaged in a limited partnership owe fiduciary duties to the limited partnership and the limited partners. This Contribution argues that the USACafes doctrine should be abandoned because it discourages freedom of contract, dissuades investors from financing new enterprises, and contravenes bedrock doctrines of corporate law.

Arbitraging Judicial Interpretation of the Delaware General Corporation Law

by Nathaniel Kiechel*

Are investors precluded from engaging in appraisal arbitrage under Delaware law, if its shares are retitled under the “street name” of a different Depository Trust Company participant before the effective date of a merger? Nate Kiechel (’17) examines this question, as presented in the 2016 Annual Ruby R. Vale Interschool Moot Court Competition, held at Widener University Delaware Law School. Delaware’s statutory definition of “stockholder” has failed to account for technological advances in underlying market systems, creating uncertainty for appraisal arbitrage investors. This Contribution argues that these arbitrageurs should be permitted to retain their right to the appraisal remedy despite underlying processes that may result in their shares being retitled, and urges the Delaware General Assembly to adopt a definition of “stockholder” that better reflects these processes and accords with the corresponding definition in federal securities laws.

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