In Solak v. Sarowitz, the Delaware Court of Chancery held that a corporate bylaw ran afoul of 8 Del. C. Section 109(b), as recently amended, where it purported to shift attorney fees and expenses to an unsuccessful stockholder that filed an internal corporate claim outside of the state of Delaware.
Two recent amendments to the Delaware General Corporate Law (DGCL) were at issue in the case. The first was the addition of Section 115, which expressly authorized Delaware corporations to adopt bylaws requiring internal corporate claims to be filed exclusively in the state of Delaware. The second was the amendment of Section 109, which, in the wake of the Delaware Supreme Court’s decision in ATP Tour v. Deutscher Tennis Bund, 91 A.3d 554 (Del. 2014), precluded Delaware stock corporations from issuing bylaws imposing liability on shareholders for the corporation’s or other parties’ attorney fees and expenses in connection with internal corporate claims.
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