Feb 7 Chevron Corp and eight other
corporations were sued by shareholders on Tuesday for adopting a
bylaw that requires common types of shareholder lawsuits be
brought exclusively in Delaware's Chancery Court.
"Exclusive forum" bylaws are being adopted by more and more
corporations as a way to control a surge in shareholder
litigation, though the move has been resisted by shareholders.
The interest in the bylaw comes as shareholders are
increasingly bringing simultaneous lawsuits making nearly
identical claims in two or more courts, often challenging merger
Tuesday's lawsuits said the nine companies adopted the bylaw
to reduce the risk that directors would be found liable.
"(The bylaw) was initiated, timed, structured and approved
to benefit the directors at the expense of the stockholders,"
said the lawsuits.
Shareholders have resisted being forced to bring claims for
breach of fiduciary duties and other matters of Delaware
corporate law in the state's Chancery Court, which is often
perceived as being overly protective of management at the
expense of shareholders.
Some companies have adopted the "exclusive forum" through
shareholder votes to amend charters, while others such as
Facebook Inc have adopted them ahead of an initial public
offering. The nine companies that were sued by shareholders
adopted the bylaw by a vote of the board of directors.
In addition to Chevron, the companies are Priceline.com Inc
, Franklin Resources Inc, SPX Corp,
Autonation Inc, Superior Energy Services Inc,
Danaher Corp, Navistar International Corp and
Curtis Wright Corp.
The lawsuits were all brought by the Kessler Topaz Meltzer &
Check LLP and Prickett, Jones & Elliott PA law firms.