Wednesday, November 10, 2010
Berkshire Hathaway just adopted an exclusive forum bylaw that would limit shareholder suits to the Chancery Court. Here's the new section 14 to their bylaws:
Forum for Adjudication of Disputes
14.1. Unless the corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or the corporation’s certificate of incorporation or by-laws, or (iv) any other action asserting a claim governed by the internal affairs doctrine.
Along those lines, I've got a paper in the works that proposes an amendment of the corporate code to facilitate the adoption of exclusive forum provisions in corporate charters. Here's the abstract.