Iliana Ongun

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For the past several years, boards of directors have increasingly faced claims that they have failed in their duty of oversight.  These so-called Caremark claims can arise in a number of contexts involving allegations of systemic failures or intentional wrongdoing.  Recently, the Delaware Court of Chancery held for the first time that officers owe the same duty of oversight as directors, an expansion of Caremark which had previously only been applied to directors.

In In re McDonald’s Corp. Stockholder Derivative Litigation,[1] the Delaware Court of Chancery denied a motion to dismiss a breach of fiduciary duty claim against the former Executive Vice President and Global Chief People Officer of McDonald’s Corporation (“McDonald’s” or the “Company”) relating to alleged sexual misconduct and inadequate oversight.…

Continue Reading Recent Delaware Chancery Court Decision Finds That Corporate Officers Owe the Same Caremark Oversight Duties as Directors

The Delaware General Assembly recently adopted amendments to the Delaware General Corporation Law (the “DGCL”), effective as of August 1, 2022.  Among other changes, the amended DGCL provides for exculpation of officers from liability for breaches of the duty of care and also expands the ability of boards to delegate authority to members of management in connection with the issuance of shares of common stock and options.  The change with the most potential for far-reaching impact is with respect to officer exculpation.  For existing corporations, a charter amendment is required to take advantage of the new officer exculpation, and it is an open question as to whether shareholders (and proxy advisory firms) will support extending exculpation to officers.
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Continue Reading 2022 Amendments to the Delaware General Corporation Law

Milbank LLP Environmental partner Matt Ahrens, Global Project, Energy & Infrastructure Finance partner Allan Marks and associates Allison Sloto (Environmental) and Pinky Mehta (Global Risk & National Security) recently co-authored a chapter titled “ESG Considerations in Project, Energy and Infrastructure Finance” in the International Comparative Legal Guide: Environmental, Social & Governance Law 2022, Second Edition. Global Corporate partners Iliana Ongun and Neil Whoriskey also contributed.
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Continue Reading Milbank Attorneys Co-Author Chapter on ESG Considerations in ICLG: Environmental, Social & Governance Law 2022

SPACs, or “blank check” Special Purpose Acquisition Companies, have surged over the past two years, raising over $75 billion (about half the total US IPO market) last year alone. Recent SEC statements add complexity to accounting and disclosure rules for SPACs and could chill the market. Even so, De-SPAC (the merger of a SPAC into a private company, taking it public) transactions will trigger more M&A and PIPE deals at least through 2022.
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Continue Reading SPACs Fuel Hot M&A and IPO Markets – Will SEC Cool the Fire?

In AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC et al., the Delaware Court of Chancery, held for the first time that reasonable measures aimed at combatting COVID-19 can violate the ordinary course of business covenant in a sale agreement if those measures “materially change [the] business or business practices” of the target company.  In connection with the attempted sale by AB Stable VIII LLC ( “Seller”) of a subsidiary holding 15 hotels to MAPS Hotel and Resorts One LLC ( “Buyer”), the Court held that by temporarily closing two hotels, limiting the capacity and amenities in others, and by furloughing and laying off workers in light of the COVID-19 pandemic, the Seller materially breached its covenant to operate in the ordinary course of business between the signing and closing of the transaction.  Accordingly, the Buyer was not required to complete the transaction.…
Continue Reading Reasonable COVID-19 Preventative Measures Can Breach Ordinary Course of Business Covenant

On November 12, 2020, Institutional Shareholder Services (“ISS”) issued its proxy voting guidelines and policy updates for 2021.  These guidelines apply for shareholder meetings taking place on or after February 1, 2021.  The most noteworthy changes are described below.  Companies included in the S&P 500 index should also note that ISS will no longer provide drafts of its reports for company review prior to publication.
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Continue Reading ISS Issues Proxy Voting Guidelines and Policy Updates for 2021