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The Chancery Weekly Roundup (May 4, 2023)
omg lol wtf such stuffs much wow
The past week has been another barnburner in the Delaware Court of Chancery. Since last Tuesday’s 14k word update on the AMC case, the parties in that case attended the teleconference with the Court, got some guidance, promised to file their stip, failed to do so, got called out by the Court, filed it immediately thereafter, got asked for revisions, filed the revisions, got asked for more revisions, filed the revisions, and finally got the final stipulation and notice on file (alongside a detailed Letter to Stockholders from the Court). The stockholders are now awaiting formal notice via 8-K within the next few days, and filing of the brief in support of the settlement on May 4th, which I’ll be covering in a megapost with a full summary of the all the details over the weekend. I’m sure I don’t have to tell you not to miss that, because, well … here you are!
Although it has felt like all-AMC-all-the-time to a certain degree, there has — at the same time — been so much else going on, it’s been hard to gain footing. Ever since the great Twitterpocalypse of 2022 when the Mimetic Titan of Trashtalking and the Platform from Which He was Birthed went head-to-head in the Delaware Court of Chancery, life around here has been … how do you say … just so freaking bonkers. 2023 feels like ever-expanding concentric circles spiraling out from some center of gravity of the October 2022 Trial-That-Never-Was and I’m just the little girl getting flung around by the centripetal force of the merry-go-round, barely holding on for dear life.
There are good aspects to this. Everything is so blessedly interesting, hardly a moment goes by without some intensely fascinating conversation coming to pass with another human being. This is wonderful, and I love it. The people that I get to share this life and this work with — they are the best. If you are reading this, and you are one of those people, thank you for keeping me sane-ish. Thank you for being my conversation partners, my sounding boards, and my interlocutors, because lord knows I need the relief. There are so many interesting issues being taken up by the Delaware Court of Chancery on a daily basis, we are never at a loss for issues to explore, for things to explain, for cases to cover, for topics to dive into. So, further in shall we dive now.
Today, the Delaware Senate voted to confirm two new Justices to the Delaware Supreme Court: Judge Abigail LeGrow and Delaware attorney N. Christopher Griffiths. Our local Delaware reporter Ellen Bardash covered all the deets.
While we are talking about the legislature, and since we have already invoked the APEs, I suppose it’s as good a time as any to at least preliminarily mention the proposed amendments to the DGCL. In what Ann Lipton has now officially dubbed the “APE Amendment” — proposed as § 242(d)(2) — the DSBA attempts to address the problem of “rational apathy” from retail stockholders. RLF has their usual debrief on the intention behind the proposed changes.
Matt Levine provided his take on the proposed amendment and RLF’s summary thereof, in the form of an inquiry that has a lot to unpack:
This seems like a rational change in the law for the meme-stock era, and a better solution than the APE stuff.
Meanwhile the APE lawsuit is still ongoing, and I’m not sure which way this cuts? On the one hand, the new law, if adopted, suggests that AMC was right to identify a problem and fix it; it’s hard to say that AMC shouldn’t have gotten around the shareholder voting requirement when the Delaware legislature now agrees that the requirement was too strict. On the other hand, if there is going to be a legislative fix, you kind of don’t need the clunky APE mechanic anymore, which might make a judge less inclined to approve it.
I cannot lie, I am immediately stuck on the notion that this proposal means anything about what “the Delaware legislature now” anythings [agrees, thinks, knows, opines, etc.]. And obviously, this is … you know … a problem that others have pointed out before, and one that is certainly real. I even had some folks in the AMC matter reach out to me after I posted about the proposed amendments to say it was disappointing to see the “government” taking the side of Adam Aron. But of course, that’s not what’s happened in any real way, for many reasons, most of which are quite complex and have so much backstory and nuance, it’s hard to explain without sounding reductive or harping. But, at the same time, let’s just be real. The legislature doesn’t even have the legislation formally on their docket for the session as far as has been made public. I don’t claim to be an expert in the process beyond an ungodly project I pulled one of those embarrassing all-nighters for as a summer associate too many decades ago, but I am a member of the DSBA Corporate Law Section and I have a general sense of how the process works (or doesn’t) and I can appreciate the subtweet intended by this qt, for example.
Because, look, I see the efficiencies in a process where the people most familiar with the subject matter are the ones who draw up the relevant legislation, even if those people are not members of the legislature. But let’s not pretend like this process is perfect. And let’s definitely not pretend like the legislature proposed this legislation, which — to be fair — no one involved is actually pretending, but it is what people assume when they hear proposed amendments are going to the Delaware General Assembly for passage, and for that, I don’t think you can blame them. They are outsiders, and as Delaweareans, ngl, I think the tendency is to chuckle at them, to say that, like parents, “they just don’t understand,” but I think we also have to consider that perhaps they actually do understand, and that the way things happen here is in fact problematic in ways that actually require reconsideration.
But given that this post was simply intended to give you a quick round-up of some of the most interesting things happening in the Delaware Court of Chancery recently, I’m not convinced that litigating some of the most fraught and complex socio-political issues of the Great First State’s Modus Operandi is on the agenda for this evening, so let’s, you know, move on.
By moving on, I’m going to run headlong into the void that is Vice Chancellor Laster’s follow-on masterwork in the New Enterprise Associates case, which I tragically have not even had time to process yet, beyond the interesting nested threads by the dueling members of the commentariat, Professors Talley and Lipton over on Twitter. This opinion puts VCL at over 250 pages issued in under seven days, which is frankly both inspiring and demoralizing, the latter only in the sense that it is so utterly unfair that life is too short for me to properly keep pace with writing as much as I would like to write about what Laster writes about and yet still have time left to do literally anything else.
Somehow on Monday, while navigating multiple rounds of redline edits with the parties in the AMC matter, Vice Chancellor Zurn also managed to run an excellent first day of PLI’s Delaware Law Developments 2023: What All Business Lawyers Need to Know, which we previewed in our April 20, 2023 edition of the Long Form. VCZ took over for Tamika Montgomery-Reeves when she stepped down to ascend to the bench on the Third Circuit and left her post as the chair of the Delaware Law Developments panel at PLI, and Vice Chancellor Zurn did a formidable job filling her shoes. While juggling all of those balls in the air, VCZ also somehow put out an opinion in the Edgio matter on Monday, which we are covering in Friday’s edition of the Long Form. Ann Lipton did a Twitter thread on it for those in the weeds on the Corwin issues at play.
For those of you bored to tears by all this case law way down in the weeds, don’t worry, I’m coming back up to the surface for you! And a year from now, you’re going to understand so much more of this stuff that you’ll be begging me for the details on how the Corwin issue played out, and you’ll get the void joke in the New Enterprise lead-in because you’ll be familiar with VCL’s prior opinion in the case, and I know it’s a common refrain of mine, but I swear, it’s gonna be grand. I mean, truly, it already is, ain’t it?
Here’s one piece of fun administrivia for the Twitterati — my favorite non-substantive moment at Monday’s PLI event was when Ryan McLeod talked about wearing his mDAU shirt from TCD and a little halo appeared over my head IRL because I gloated so hard. It’s the dumbest, weirdest thing how happy it makes me when people wear our merch and then send me messages about how happy they are to wear it and spread the gospel of the Delaware Court of Chancery out to the world. This baby is still one of my favorite models (also my favorite clothing item name). But I mean, just look at that face.
Ok, enough trips down merch memory lane, let’s take a quick look at what else we’ll be covering in the coming weeks from what's happening around the Courts, in addition to the AMC coverage coming up this weekend.
Elon’s $55 billion compensation package case — supplemental briefing update
Coinbase derivative complaint and a primer on derivative litigation
Luigi Crispo’s mootness fee application and motion to compel discovery
Fox Corp. derivative litigation in the wake of the Dominion settlement
The past few weeks in the Court of Chancery have seen incoming new litigation involving: PTON 0.00%↑ COIN 0.00%↑ FOX 0.00%↑ MRC 0.00%↑ TRIP 0.00%↑ GETR 0.00%↑ ML 0.00%↑ CUTR 0.00%↑ JCI 0.00%↑ POWW 0.00%↑
Additionally, there have been cases filed involving OptionColors Capital, Mountain Crest Capital, KKR, Cross Pond Renewable Ventures LLC, Protean Advisors LLC, Sentinel Global Partners, Moneylion, Inc., and even some Square Mile Poultry Preferred and Poultry Ownership LLP companies that appear to have nothing at all to do with chickens.
Then there is Buzzfeed, Lottery.com, Stitch Fix, Inc., and the advancement cases involving both Charlie Javice and the former Twitter executives, who are also still awaiting their golden parachutes, just to name a few of the items coming across the docket in the last few weeks. And this is just scratching the surface. And these are just the ones with interesting people and names, to say nothing of the ones with fascinating legal issues but lesser-intriguing personalities. There’s truly an embarrassment of riches.
Cast your votes in the comments. In addition to the above list, what else would you like to see us dig into and cover in more depth?
See you around the interwebs, and if you’re on Bluesky, find me there. If you need an invite, send me an email at email@example.com with a good pitch, and I'll do my best.