Assignment for Benefit of Creditors

 View Only

Shareholder Approval of Board Resolution authorizing an ABC

  • 1.  Shareholder Approval of Board Resolution authorizing an ABC

    Posted 04-13-2022 01:46 PM
    Delaware law currently requires shareholder approval of Board of Director resolution authorizing an ABC under DGCL §271.  The Delaware Supreme Court heard argument on an appeal of a decision by Vice Chancellor Laster in December 2021 in the Stream T.V. Networks case wherein he found that shareholder approval was not required for an action by a Board of a failing versus unprofitable company.  The Court of Chancery decisions are attached.  While the Supreme Court's decision will not change how ABCs are "administered", the outcome of the appeal will potentially impact the need for shareholder approval of any Delaware company (corporation or LLC) whether the ABC is filed in Delaware or some other state.


    ------------------------------
    Geoff Berman, Observer
    Senior Managing Director
    Development Specialists, Inc.
    Los Angeles, CA
    ------------------------------