Nate Sussman Quoted in Bloomberg Law on Delaware Case Addressing Stockholder Agreements  

Munger, Tolles & Olson’s Nate Sussman was quoted in Bloomberg Law’s recent article, titled “Moelis Claims Invalidated Pact Was Always Legal in Delaware Law.”

The article discusses West Palm Beach Firefighters’ Pension Fund v. Moelis & Company, in which Moelis & Company is appealing a Delaware Chancery Court ruling that invalidated various stockholder governance rights in the company’s agreement with founder Ken Moelis. In the wake of the Chancery Court’s ruling, Delaware’s legislature amended Section 122 of the state’s General Corporation Law to permit stockholder agreements including rights of the kind that were struck down in Moelis. Although Moelis & Company’s appeal will be decided based on prior law, the Delaware Supreme Court’s decision could offer insight into the kinds of provisions that would be deemed invalid even under the amended Section 122.

Commenting on the Delaware Supreme Court’s request for supplemental briefing, Nate explained that it could signal the Court’s interest in clarifying the outer limits that Delaware law imposes on stockholder governance rights. “If the Supreme Court addresses this question directly in its decision, it could provide important precedent not only for the limited set of cases to be resolved based on Delaware law as it existed before [the amended Section 122], but also cases addressing the limits of stockholder agreements in the future,” he said.

Read the Bloomberg Law article. (Subscription may be required)