Prof. Ribstein posts about the issues in a recently filed Chancery Court lawsuit by a law professor against CA, Inc. The issue is whether the shareholders can adopt a bylaw under Section 109 of the Delaware General Corporation Law. As summarized by Prof. Ribstein: “Section 141(a) empowers the directors to manage the company. Section 109 says the bylaw must not be inconsistent with law, and 141(a) says the director power is except as otherwise provided in the chapter. So is the 109 bylaw power subject to 141(a), or is 141(a) subject to the bylaw power? We seem to have a loop.”
He adds that: “The shareholders probably can amend the bylaws to require a unanimous director vote under 141(b). The question here is whether they can restrict the board’s power to enter into plans that last more than a year.” This the cutting edge.
Here is the link:
Ideoblog: Lucian Bebchuk, shareholder activist