WASHINGTON, D.C. – Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR), issued the following statement today on a vote by the Delaware State Senate to bar companies from adopting “fee shifting” bylaws to guard against abusive merger-and-acquisition lawsuits (SB 75):
“Today’s passage by the Delaware State Senate of SB 75 to ban company ‘fee shifting’ bylaws without expanding judicial authority to combat meritless and abusive lawsuits threatens Delaware’s billion-dollar incorporation franchise.
“Companies that incorporate in Delaware have valued the state’s clear and fair corporate law principles. But they are increasingly becoming victims of ‘extortion through litigation.’ In the last four years, 93% of all mergers and acquisitions valued at over $100 million have been challenged by one or more lawsuits.
“By agreeing to remove a necessary tool to combat frivolous lawsuits while refusing other fixes to deter meritless lawsuits, the Delaware State Senate has sided with the Delaware trial bar over the many companies incorporated in the state. We urge the Delaware House to reject this bill.”
ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the global, national, state, and local levels.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.