Chancery Rejects Bid For An “Equitable Eraser”
It may seem obvious that “[e]quity cannot bless th[e] deliberate violation of an explicit statutory prohibition,” but in the recent Delaware Court of Chancery decision, TS Falcon I, LLC v. Golden Mountain Financial Holdings Corp., Vice Chancellor Lori Will reminded us of this maxim in the context of setting record dates for annual stockholders’ meetings. As […]
Nora L. Brodnitz is an Associate and Alex J. Kaplan is a Partner at Sidley Austin LLP. This post is based on their Sidley memorandum and is part of the Delaware law series; links to other posts in the series are available here.
It may seem obvious that “[e]quity cannot bless th[e] deliberate violation of an explicit statutory prohibition,” but in the recent Delaware Court of Chancery decision, TS Falcon I, LLC v. Golden Mountain Financial Holdings Corp., Vice Chancellor Lori Will reminded us of this maxim in the context of setting record dates for annual stockholders’ meetings. As discussed herein, the court declined to bless the defendants’ deliberate violation of the express language of Section 213(a) of the Delaware General Corporation Law, and further rejected the defendants’ request that the court apply Section 205 to cure this “defective corporate act.”
