Document Type
Article
Publication Title
Delaware Corporate Law Bulletin
Publication Date
Fall 2025
Page Number
137
Keywords
validity, enforceability, standard of review
Disciplines
Commercial Law | Law
Abstract
Of the myriad corporate defenses erected during the hostile takeover boom of the mid-to-late 1980s, the one that has received the least scrutiny by the Delaware judiciary-at least until recently-is the so-called advance notice bylaw. Advance notice bylaws adopted by corporate boards of directors are "designed and function to permit orderly meetings and election contests and to provide fair warning to the corporation so that it may have sufficient time to respond to shareholder nominations." Kellner v. AIM ImmunoTech Inc., 320 A.3d 229 (Del. July 11, 2024) ("Kellner") (quoting Openwave Sys. Inc. v. Harbinger Cap. Partners Master Fund I, Ltd., 924 A.2d 228, 239 (Del. Ch. 2007)). Traditionally, advance notice bylaws "require[d] stockholders to provide the board with prior notice of, and information about, their director nominations." They have been modified "over time to meet changing market conditions and to adjust to evolving securities regulations." As the technology has changed and advanced notice bylaws have become more complicated, the Delaware Court of Chancery ("Chancery Court") has been asked in recent years to address several challenges to both the substance and application of these bylaws. Confronted by overlapping-and potentially conflicting-legal standards of review employed by the Chancery Court in addressing these challenges, the Delaware Supreme Court (the "Court") in Kellner clarified the appropriate standard for assessing these challenges.
Recommended Citation
Robert S. Reder and Noah Nance,
Delaware Supreme Court Clarifies Standard of Review for Advance Notice Bylaw, 78 Delaware Corporate Law Bulletin. 137
(2025)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/1710