Significant Amendments to the Delaware General Corporation Law Are Set to Become Effective

Starting August 1, 2024, a significant set of amendments to the Delaware General Corporation Law (DGCL) will take effect, both prospectively and retroactively. These amendments address concerns raised by recent Delaware Court of Chancery decisions, clarifying the ability to enter into agreements between stockholders and companies, and allowing penalties in merger agreements. They also authorize the use of stockholder representatives in merger agreements and provide clear guidelines for board and stockholder approval of agreements. These reforms aim to align the law with market practices and resolve uncertainties from recent judicial decisions. For more information, click here.