Moelis decision (2024)
Chancery decision invalidating certain stockholder-agreement provisions, prompting Delaware SB 313.
Definition
West Palm Beach Firefighters Pension Fund v. Moelis & Company (2024 Del. Ch.) invalidated stockholder agreement provisions transferring excessive control to founder Ken Moelis. The Delaware legislature responded with SB 313 expanding permissible stockholder agreement provisions.
Context
Demonstrates Delaware responsiveness to perceived legal gaps via rapid legislative action.
Example
After Moelis, founder-control provisions in stockholder agreements remained valid under SB 313 expanded scope, restoring market expectations.
Common pitfalls
- LLC Operating Agreements have broader contractual freedom under § 18-1101 than corporate stockholder agreements.
- Stay current with Delaware case law and statutory responses.