BLT: February 2020


Featured Articles

Business & Corporate

The Boundary of “Proper Purpose” for Corporate Books and Records Review in Delaware

Considering the “murky legal landscape” surrounding a stockholder’s statutory right to demand inspection of a corporation’s books and records, the Delaware Court of Chancery recently decided that searching for support for a shareholder’s complaints about the board’s deal-making decisions as part of a proxy contest is not a “proper purpose.” However, the court left open the possibility that a proxy contest could serve as a proper purpose if the shareholder could present credible evidence of questionable transactions.

Business & Corporate

A Third Way: Recovery of Excessive Executive Compensation as Disguised Unlawful Dividends

Fraudulent transfer and fiduciary claims are the traditional tools that creditors use to seek recovery for excessive compensation paid to managers of insolvent companies. However, creditors may also be able to characterize excessive compensation paid to manager-shareholders as disguised and unlawful dividends in certain jurisdictions. Disguised unlawful dividend claims may have potential advantages over traditional fraudulent transfer and fiduciary claims depending upon the jurisdiction, including the inapplicability of business judgment rule protection, the unavailability of exculpation, and the ability to recover statutory interest.

Business & Corporate

People: The Overlooked Ingredient in Successful Technology Changes

Significant changes in law firms can cause ripples and turbulence, and changes in technology are no exception; and when firm members feel no ownership of this change, consequently, there is little investment in its successful implementation. Law firms must remember to pay attention to the people side of introducing new technology: ask what kind of training his staff and attorneys thought would be most useful, and pay particular attention to those firm members who are most hands-on in the processes changing with the new technology.