United States: Corporate Law Developments (February 6, 2017): President Trump's Executive Order On U.S. Immigration Policy; Delaware Court Rejects Supermajority Director Removal Bylaw; Ftc Revises Hart-Scott-Rodino Antitrust Improvements Act Thresholds For 2017

This week's corporate law news roundup includes discussions of President Trump's Executive Order (Order) on U.S. immigration policy; the decision of the Delaware Chancery Court that invalidated a corporate bylaw that purported to require a supermajority vote to remove directors; and the release by the Federal Trade Commission (FTC) of its annual revision to the minimum "size of transaction" and "size of person" thresholds requiring pre-merger notification to the FTC, effective for all transactions closing on or after February 27, 2017.

On Friday, January 27, 2017, the Trump administration issued an Executive Order entitled "Protecting the Nation from Terrorist Attacks by Foreign Nationals" and ordered a restriction of entry to citizens of seven predominantly Muslim countries (Iraq, Syria, Sudan, Iran, Somalia, Libya and Yemen). The Department of Homeland Security (DHS) posted an update on Monday, January 30, 2017, that nearly all travelers (except U.S. citizens) traveling on passports from the seven countries will be temporarily suspended from entry into the U.S. The DHS notice also stated that lawful permanent residents (LPRs or green card holders) will be allowed to board U.S.-bound aircraft but will be subject to national security checks and assessed for exceptions to the ban on a case-by-case basis. Since then, a U.S. federal court has ordered that all LPRs be admitted. Below are some of the key implications, consequences and expectations as a result of the Executive Order and actions taken thereafter:

  • only those non-LPRs on diplomatic visas (NATO, the UN, an embassy or a consulate) from the designated countries will be admitted;
  •  all other non-LPRs (visas including B-1/B-2, E, F, L, O, etc.) are barred from entry and their visas have been revoked;
  • initially, there was no guidance regarding dual citizens (e.g., a citizen of Canada and one of the designated countries); on January 30, 2017, however, DHS stated that dual nationals of the UK and one of the designated countries would be exempt from the Executive Order when travelling on a valid U.K. passport and U.S. visa on that U.K. passport or under the Visa Waiver program; since then, the exemption has been expanded and now all dual citizens may travel on visas so long as the visa is not on the passport of one of the seven designated countries;
  • there has been no guidance as to national security checks to which LPRs from one of the designated countries will be subject, but one should expect intrusive questioning (including the checking of internet history, text messages and social media use);
  • because this is an Executive Order with no precedent or guidance, we can expect inconsistent application of the rule by officers at the ports of entry; and
  • although unconfirmed reports have been circulated in the media and social media that this list of countries would be expanded, the U.S. Department of State has confirmed that the travel ban is not being expanded at this time; nonetheless, nationals of non-listed countries (especially predominantly Muslim countries) should expect greater scrutiny, including the checking of internet history, text messages and social media use.

We will keep monitoring this issue and provide updates on further developments on our website. Our Withers advisory is available at http://www.withersworldwide.com/news-publications/president-trumps-us-immigration-policy-implications-and-consequences–2.
In a decision issued by the Delaware Chancery Court on January 24, 2017, the court ruled that Section 141(k) of the Delaware General Corporation Law unambiguously confers on a majority of the stockholders the power to remove directors with or without cause and a bylaw provision requiring a supermajority vote is unlawful. The bylaw in question purported to require a vote of 2/3rds of the outstanding shares to remove a director. In light of the successful ruling, the plaintiff withdrew a second count, alleging that directors had breached their fiduciary duty to stockholders by enacting such a bylaw. This recent decision follows a similar decision reached by the Chancery Court in 2016 in In Re Vaalco Energy, Inc. Stockholder Litigation, in which the court invalidated charter and bylaw provisions that provided that directors were removable only for "cause"; in that case, the Chancery Court held that such a limitation on removing directors was only permissible for companies with classified boards or cumulative voting. For more information on the Frechter v. Zier (Nutrisystem, Inc.) case, see http://courts.delaware.gov/Opinions/Download.aspx?id=251800.

Under U.S. antitrust law, parties to a merger, acquisition of stock or assets or other business combinations meeting certain thresholds must file a pre-merger notification with the U.S. Federal Trade Commission (FTC) and the U.S. Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act (HSR). Such thresholds (a "size of transaction" threshold and a "size of person" threshold) are revised annually. On January 19, 2017, the FTC announced its adjusted merger notification thresholds for 2017. Under the new size-of-person threshold, when the value of a proposed transaction exceeds $80.8 million, but is less than $323 million, the transaction must be reported if (1) one party to the transaction has total assets or net sales of $161.5 million or more and (2) the other party has total assets or net sales of $16.2 million or more. Under the size-of-transaction threshold, all transactions valued in excess of $323 million will be reportable without regard to the size-of-person test. These new 2017 HSR thresholds will become effective for all transactions closing on or after February 27, 2017. For more information, see https://www.ftc.gov/news-events/press-releases/2017/01/ftc-announces-annual-update-size-transaction-thresholds-premerger.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions