March 15, 2023
An article written by Scott Watnik and Stuart Riback, entitled, “Strength through Uncertainty: New Delaware Chancery Court Ruling Potentially Enables Delaware Companies to “Ratify” Corporate Acts That Might (or Might Not) Be Defective” was published on March 15, 2023 in Business Law Today. In the article, Scott and Stuart share their legal insights on the Delaware Court of Chancery’s recent decision in In re Lordstown Motors Corp. (Del. Ch. C.A. No. 2023-0083-LWW, Feb. 21, 2023) and its potential impact on Sections 204 and 205 of the Delaware Corporate Law which provide Delaware companies with the ability to retroactively ratify certain corporate actions that would otherwise have been void or voidable due to a mistake or defect. In the article, Scott and Stuart share their view that although prior Chancery Court precedent supported the premise that Delaware companies had to first show that a corporate act is actually defective to use of Sections 204 and 205, the Court of Chancery’s recent decision in Lordstown may mark the beginning of a broad expansion of Sections 204 and 205 to corporate acts that Delaware companies merely believe might suffer from a defect or mistake.
An online copy of the article is available here.
A PDF of the article is available here.