May 22, 2007
SEC to Certify Questions to Delaware Supreme Court
Posted by Gordon Smith

Here is the new amendment to Delaware's Constitution (bold):

Section 11. The Supreme Court shall have jurisdiction as follows:


(8) To hear and determine questions of law certified to it by other Delaware courts, the Supreme Court of the United States, a Court of Appeals of the United States, a United States District Court, the United States Securities and Exchange Commission, or the highest appellate court of any other state, where it appears to the Supreme Court that there are important and urgent reasons for an immediate determination of such questions by it. The Supreme Court may, by rules, define generally the conditions under which questions may be certified to it and prescribe methods of certification.

This is huge! It could be the most important development in Delaware corporate law since Woodrow Wilson convinced the New Jersey Legislature to pass the Seven Sisters Acts. (See here.) By agreeing to entertain questions certified by the SEC, Delaware enables shareholders to frame specific questions about Delaware law without regard to an underlying dispute. So entrepreneurial corporate governance activists like Lucian Bebchuk can get answers to questions about the extent of the shareholders' bylaw amendment power. Among other things. (See my post about Bebchuck v. CA Inc. here.)

For more, see Francis Pileggi, Peter Lattman, and Steve Bainbridge.

Corporate Governance, Corporate Law, Delaware | Bookmark

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