Tuesday, November 18, 2014

Bainbridge on Fee-Shifting Bylaws

Steve Bainbridge at ProfessorBainbridge.com has posted a couple of discussions of fee-shifting bylaws.

As many of you know, last spring, in the ATP Tour case, the Delaware Supreme Court upheld a bylaw requiring the losing party in shareholder litigation to pay the other side's attorneys' fees. The case involved a non-stock membership corporation, but there's no relevant distinction between non-stock corporations and ordinary corporations in either the opinion or the statute. A bill was introduced in the Delaware legislature to amend the statute to overturn the ATP Tour decision, but the legislature deferred any action pending further study.

Professor Bainbridge argues in favor of the ATP Tour result. His first post is here. The second post is here.


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