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