Two companies have adopted “loser pays” bylaws, under which investors who sue a company and lose must pay the company’s legal costs, The Wall Street Journal reported. The companies appear to be the first to adopt such bylaws after a May 8 ruling by the Delaware Supreme Court appeared to permit them.
The companies are Echo Therapeutics Inc., a Philadelphia-based maker of medical devices, and LGL Group Inc., an Orlando-based maker of electrical components. The Journal discovered the bylaw changes in regulatory filings.
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