The fusillade of learned commentary on recent developments in Delaware corporate law, known colloquially as SB 21, continues apace. The Delaware Legislature passed legislation in March that statutorily defines controlling shareholder and director independence, via an amendment to DGCL Section 144. It also imposes additional prerequisites in order for a shareholder to demand corporate books and records, via an amendment to DGCL Section 220. We have highlighted and curated selected articles about this topic on these pages here, here, and here.

A recent scholarly analysis of “what SB 21 does” and “what questions remain” was recently penned by the prolific, venerable corporate law professor Stephen Bainbridge, whose scholarship is cited in Delaware court decisions. The good professor has already published extensively on this topic. His latest article, linked above, highlights the key provisions of SB 21 as follows:

1. A new definition of “controlling stockholder” requiring either majority voting power ownership or at least one-third ownership plus managerial authority;
2. Revised standards for cleansing conflicted controller transactions that modify the framework established in Kahn v. M & F Worldwide Corp.;
3. Automatic exculpation for controlling shareholders from monetary damages except for duty of loyalty breaches, bad faith actions, or improper personal benefits;
4. A narrower definition of “director independence” with heightened presumptions for directors of publicly traded companies; and
5. Significant limitations on shareholder inspection rights under DGCL § 220, restricting access primarily to board-level documents.