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Trends in Exclusive Forum Bylaws

The Conference Board Director Notes, January 2014

13 Pages Posted: 21 Mar 2014  

Date Written: January 15, 2014

Abstract

In response to the rising tide of strike suits challenging mergers and acquisitions and the adequacy of executive compensation disclosures, more companies are adopting or considering adopting exclusive forum bylaws. These bylaws, which are largely a Delaware phenomenon, require that derivative actions, stockholder class actions, and other intracorporate disputes be litigated exclusively in designated courts. This article examines the increase in the adoption of such bylaws following a June 2013 Delaware Court of Chancery decision upholding their validity. It also examines the language companies are including in such bylaws, their enforceability in litigation and adoption considerations.

Keywords: exclusive forum, bylaws, Delaware

JEL Classification: K22, K41

Suggested Citation

Allen, Claudia H, Trends in Exclusive Forum Bylaws (January 15, 2014). The Conference Board Director Notes, January 2014. Available at SSRN: https://ssrn.com/abstract=2411715

Claudia H Allen (Contact Author)

KPMG ( email )

200 E. Randolph Drive, Suite 5500
Chicago, IL 60601
United States

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