Chancery Hears Fee-Shifting Bylaws Argument

After the Delaware Supreme Court decision in ATP Tour, Inc. v. Deutscher Tennis Bund, Del. Supr., No. 534, 2013 (May 8, 2014), highlighted on these pages, in which the court  upheld fee-shifting bylaws, a number of companies have adopted such bylaws, and several cases are now pending in the Delaware Court of Chancery to determine–based on the facts of those particular cases, whether there is an equitable exception applicable to the enforceability of such bylaws.

Frank Reynolds of Thomson Reuters has written an article about one pending Chancery case where the issue has been raised and Chancellor Bouchard has asked for additional briefing before determining whether he will address the issue. For those interested in corporate litigation, it doesn’t get much more cutting-edge. See Kastis et al. v. Carter et al., No, 8657, hearing held (Del. Ch. Aug. 15, 2014).