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Research Handbook on Shareholder Power

Research Handbook on Shareholder Power

Research Handbooks in Corporate Law and Governance series

Edited by Jennifer G. Hill and Randall S. Thomas

Much of the history of corporate law has concerned itself not with shareholder power, but rather with its absence. Yet, as this Handbook shows, there have been major shifts in capital market structure that require a reassessment of the role and power of shareholders. This book provides a contemporary analysis of shareholder power and considers the regulatory consequences of changing ownership patterns around the world. Leading international scholars in corporate law, governance and financial economics address these central issues from a range of different perspectives including historical, contemporary, legal, economic, political and comparative.

Chapter 16: Whose law is it? Battling over turf in shareholder litigation

James D. Cox

Subjects: law - academic, corporate law and governance


The June 2013 decision in Boilermakers Local 154 Retirement Fund v Chevron is a legal watershed. In Boilermakers, Delaware’s Chancellor Leo Strine upheld a forum selection provision that had been adopted solely by the corporation’s board of directors. Chancellor Strine rested his decision on the view that shareholders are linked to the corporation via contract, which in part is formed by the evolving provisions of the company’s bylaws. Less than a year later, the Delaware Supreme Court in ATP Tour, Inc. v Deustscher Tennis Bund, reflected its full agreement with the approach taken in Boilermakers by opining that a bylaw shifting fees to the losing party was valid. While Boilermakers and ATP Tour, Inc. deal with very different features of shareholder-initiated litigation, they share a common concern: a belief that shareholder initiated litigation is too frequent and invariably vexatious. This fear is most easily understood with respect to the problem addressed via forum selection clauses.

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