Delaware Ruling Encourages Firms To Modify Removal Provisions
The Delaware Chancery Court recently held that directors in companies without classified boards may be moved from office without cause irrespective of the provisions of a company’s corporate charter. This ruling should encourage companies to review their bylaws and amend these bylaws as necessary. A significant amount of Delaware companies have non-classified boards with bylaw provisions that only allow removal of directors ‘for cause.’ The Delaware Chancery Court reasoned that these provisions were not valid under Delaware law. In in re … Continued