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Delaware Supreme Court Affirms Dismissal Of As-Applied Equitable Challenges To Advance Notice Bylaws As Unripe
06/09/2026
On April 29, 2026, the Delaware Supreme Court, sitting en banc, affirmed a pair of decisions by the Delaware Court of Chancery dismissing stockholder complaints seeking to assert as-applied equitable challenges to the adoption of advance notice bylaws. In re The AES Corporation and Owens Corning, Cons. No. 218, 2025, No. 257, 2025 (Del.).
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Delaware Court Of Chancery Enforces California Forum Selection Clause In Employment Agreement With Stockholder, Notwithstanding Delaware Exclusive-Forum Bylaw
06/09/2026
On April 21, 2026, Vice Chancellor Nathan A. Cook of the Delaware Court of Chancery granted a motion to dismiss breach of fiduciary duty claims asserted by Masimo Corp. (the “Company”) against its former CEO and board chairman, enforcing a California forum selection clause in defendant’s employment agreement. Masimo Corp. v. Kiani, No. 2024-1086-NAC (Del. Ch. Apr. 21, 2026).
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Delaware Court Of Chancery Reinstates CEO After AI-Aided Earnout Takeover
06/09/2026
On March 16, 2026, Vice Chancellor Lori W. Will of the Delaware Court of Chancery held that a gaming conglomerate pretextually terminated three key executives of an acquired video game studio to avoid up to $250 million in contingent earnout payments, ordered reinstatement of the acquired company’s CEO, and extended the earnout measurement period. Fortis Advisors LLC v. Krafton, Inc., 2026 WL 730977 (Del. Ch. Mar. 16, 2026). In a post-trial decision, the Vice Chancellor cited extensive evidence generated by AI and ordered a remedy designed to return bargained-for operational control back to the CEO.
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Delaware Court Of Chancery Largely Dismisses Post-Merger Earnout Claims
06/09/2026
On May 1, 2026, Vice Chancellor Bonnie W. David of the Delaware Court of Chancery largely granted a motion to dismiss claims for fraud, breach of contract, and breach of the implied covenant of good faith and fair dealing, arising out of a buyer’s alleged failure to use commercially reasonable efforts and achieve certain earnout milestones following its acquisition of a medical device company. Meyers v. Zimmer Biomet Holdings, Inc., 2026 WL 1194997 (Del. Ch. May 1, 2026).
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Delaware Supreme Court Confirms Proxy Dissemination Starts Laches Clock For Disclosure Claims
06/09/2026
On May 7, 2026, the Delaware Supreme Court affirmed the dismissal of stockholder claims challenging a de-SPAC transaction, holding that claims filed more than three years after the allegedly misleading proxy was disseminated were barred by laches. The decision affirmatively establishes that disclosure-based claims accrue on the date that a proxy is disseminated—not the deadline for redemption or the date of the merger closing. Reilly v. Horn, No. 426, 2025 (Del. May 7, 2026), aff’g 2025 WL 2781735 (Del. Ch. Sept. 30, 2025).
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Delaware Supreme Court Affirms That Unreasonable Restrictive Covenants Are Not Enforceable, Regardless Of The Remedy Sought
04/23/2026
On February 10, 2026, the Delaware Supreme Court, sitting en banc, affirmed a ruling by the Delaware Court of Chancery that restrictive covenants in employment agreements are subject to a reasonableness analysis regardless of whether a plaintiff seeks injunctive relief or monetary damages and granted summary judgment in favor of defendants. Fortiline, Inc. v. McCall, No. 300, 2025, 2026 WL 369934 (Del. Feb. 10, 2026). This decision clarifies an important distinction in Delaware law between restrictive covenants and forfeiture-for-competition provisions, with significant implications for employers seeking to enforce noncompete and non-solicitation agreements.
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Delaware Supreme Court Holds Restrictive Covenants Still Enforceable After Stock Unit Consideration Forfeited
04/23/2026
On February 3, 2026, the Delaware Supreme Court, sitting en banc, reversed a decision from the Delaware Court of Chancery that had dismissed claims for breach of restrictive covenants and breach of the implied covenant of good faith and fair dealing brought by a company against a former employee. N. Am. Fire Ultimate Holdings, LP v. Doorly, No. 142, 2025, 2026 WL 274647 (Del. Feb. 3, 2026). The Court ruled that consideration must be measured at the time a contract was formed, not at the time of its enforcement, and thus the automatic forfeiture of the stock units granted in consideration did not nullify the covenants.
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Delaware Supreme Court Affirms Books And Records Demand May Rely On Post-Demand Evidence And Sufficiently Reliable Hearsay To Establish A Credible Basis
04/23/2026
On March 25, 2026, the Delaware Supreme Court, in a divided en banc opinion, affirmed a Court of Chancery order to comply with a Section 220 demand based on a petition that included post-demand evidence and hearsay. Paramount Global v. Rhode Island, No. 2024-0457 (Del. Mar. 25, 2026). The Court agreed that evidence arising after a books and records demand can be used to establish a credible basis “under exceptional circumstances” and that “sufficiently reliable hearsay” evidence is admissible for books and records demands.
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Delaware Court Of Chancery Enforces Texas Forum Selection Bylaw Retroactively
04/23/2026
On April 13, 2026, Vice Chancellor Bonnie W. David of the Delaware Court of Chancery granted defendants’ motions to dismiss derivative claims brought by stockholders of Tesla, Inc. (the “Company”) in Delaware. In re Tesla, Inc. Derivative Litigation, C.A. No. 2024-0631-BWD (Del. Ch. Apr. 13, 2026). The Company had redomesticated from Delaware to Texas and, at the same time, adopted a bylaw designating Texas as the exclusive forum for derivative litigation. The Court enforced the bylaw and dismissed the case even though the claims were brought and the alleged conduct at issue occurred prior to the formal adoption of the bylaw and the Company’s redomestication in Texas.
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Delaware Supreme Court Upholds Constitutionality Of Senate Bill 21
03/03/2026
On February 27, 2026, the Delaware Supreme Court, sitting en banc, affirmed the constitutionality of Delaware Senate Bill 21 (“SB 21”), which amended Section 144 of the Delaware General Corporation Law (“DGCL”) to alter the standard of review applicable to certain controlling stockholder transactions. Rutledge v. Clearway Energy Group LLC, No. 248, 2025, 2026 WL 548504 (Del. Feb. 27, 2026). The decision resolves the constitutional uncertainty that had surrounded the amendments since their enactment and confirms that companies may proceed with confidence that compliance with the safe harbor provisions in SB 21 will provide the intended protections.
