In response to the decision in the ATP case, the Delaware State Bar is now considering a proposed amendment to Delaware corporate law that would limit the Delaware Supreme Court’s decision to non-stock corporations. The effect of such a limitation would be that ordinary stock corporations would not be able to take advantage of fee-shifting bylaw provisions. Such a limitation would prevent ordinary corporations from taking advantage of what some believe to be an inappropriate shifting of burden and resulting unfair deterrence of stockholder litigation.
The Delaware General Assembly is expected to have the proposed legislation presented to it prior to June 30 (the end of the current legislative session). If passed, the legislation would become effective August 1, 2014, and again level the playing field in Delaware stockholder litigation.