Thursday, March 20, 2014
For those interested, here is an amicus brief in the Hershey section 220 case arguing that violations of domestic or international law are ultra vires acts. Download Hershey Section 220 Amicus Brief
[B]ecause Delaware corporations (including defendant The Hershey Company) are chartered only for “lawful” acts or activity, 8 Del. C. § 101(b), illegalities committed by the company are considered ultra vires and may be the proper source of both direct shareholder suits and injunctive actions by the state Attorney General. Delaware law is explicit on this point. A “lack of capacity or power may be asserted . . .[i]n a proceeding by a stockholder against the corporation to enjoin the doing of any act or acts” or “[i]n a proceeding by the Attorney General to dissolve the corporation, or to enjoin the corporation from the transaction of unauthorized business.” 8 Del. C. § 124.