2024 was an eventful year for shareholders under Delaware corporate law, and one both private equity and venture capital watched with great interest.
Perhaps most notably, in August 2024, the Delaware General Corporation Law ("DGCL") was amended to abrogate various earlier Delaware Court of Chancery rulings that many U.S. lawyers considered inconsistent with market practice.
Among these were amendments addressing the decision in Moelis & Company,1 which held that relatively common shareholder agreement clauses granting investors broad "pre-approval" or "veto" rights were invalid under the DGCL for substantially restricting the board of directors' ability to manage the corporation's business.
Writing in The M&A Lawyer (PDF, 187 KB) , we explain how the Moelis amendments moved Delaware and Canadian corporate law regarding shareholder agreements a little closer together, as well as how several significant differences still remain.
Footnote
1 See West Palm Beach Firefighters' Pension Fund v. Moelis & Company, C.A. No. 2023-0309-JTL (Del. Ch. Feb. 23, 2024).
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