On March 25, Delaware adopted significant amendments to §§ 144 and 220 of the Delaware General Corporation Law which aim to provide greater clarity and predictability to corporate fiduciaries in light of certain recent controversial decisions from the Delaware Court of Chancery.
Amendments to § 144 of the DGCL
- Provide safe harbor protections for interested transactions with directors, officers, controlling stockholders, and members of a control group, including providing specific processes for approval of such transactions and a path for ratification by stockholders after the fact in some circumstances
- Lower the requirements for approval of acts and transactions with interested directors, officers, and controlling stockholders
The amendments to § 220 of the DGCL
- Provide more clarity with respect to the scope and requirements for a stockholder inspection of books and records, including an exclusive list of items that may be requested
- Raise the procedural requirements for such demands
- Allow corporations to impose confidentiality restrictions consistent with current case law
The amendments are immediately effective and apply to all prior and future acts and transactions, but they do not apply to court proceedings that were pending or completed on or before February 17, 2025, or to stockholder demands to inspect books and records made on or prior to that date.
