A non-reciprocal fee-shifting bylaw doesn’t apply to a former shareholder’s challenge to a reverse stock split of 10,000-to-1, the Delaware Court of Chancery has ruled.
In Strougo v. Hollander, a 23-page opinion filed Monday, Chancellor Andre G. Bouchard said the bylaw did not apply in the case because it was adopted after the challenger sold his stock in the company. He also said Section 109(b) of the Delaware General Corporation Law does not authorize a bylaw that regulates the rights of a stockholder whose equity interest had been eliminated before the bylaw was adopted.
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