Thank you for sharing!

Your article was successfully shared with the contacts you provided.
James G. McMillan III

In an opinion issued June 6, Nguyen v. View, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery ruled that Section 204 of the Delaware General Corporation Law, which allows a “defective corporate act” to be ratified, cannot be used to validate an “unauthorized” corporate act. In a case of first impression, the plaintiff, Paul Nguyen, held a majority of the corporation’s common stock and was entitled to a class vote when the company sought to issue new rounds of preferred stock. Although Nguyen vetoed the first new round, the company issued that round and several more anyway, to the tune of over $500 million. Years later, when the transactions were invalidated, the company’s initial preferred stockholders converted their shares to common stock and voted as a majority of the common to ratify the transactions under Section 204.

This premium content is locked for
Delaware Business Court Insider subscribers only.

  • Subscribe now to enjoy unlimited access to Delaware Business Court Insider content,
  • 5 free articles* across the ALM Network every 30 days,
  • Exclusive access to other free ALM publications
  • And exclusive discounts on ALM events and publications.

*May exclude premium content
Already have an account?
Interested in customizing your subscription with Law.com All Access?
Contact our Sales Professionals at 1-855-808-4530 or send an email to groupsales@alm.com to learn more.

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2017 ALM Media Properties, LLC. All Rights Reserved.