Fee Shifting Bylaws in Delaware: The Facts on the Ground (Part 2)
What are some attributes or variations among the different fee shifting bylaws?
First, the numbers have been relatively modest, so far.
Second, they have not been limited to Delaware corporations. At least one has been put in place by a Maryland corporation. See Current Report, American Spectrum Realty, Inc., July 24, 2014 (adding bylaw that would "provide for fee-shifting with respect to certain types of litigation brought against the Company and/or any director, officer, employee or affiliate where the claiming parties do not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought."). The bylaw is here.
Another has been inserted into the bylaws of a Utah corporation. See Current Report, NATURE’S SUNSHINE PRODUCTS, INC., August 28, 2014 ("The sole purpose of the Restated Bylaws is to add an additional section to the Bylaws which requires that any unsuccessful shareholder litigant in a suit against the Company reimburse the Company for all of the Company’s litigation costs, including reasonable attorney fees.").
Third, they have appeared in limited partnership agreements and registration statements. See Form S-1, Viper Energy Partners LP, August 13, 2014, at 111 ("If any person brings any of the aforementioned claims, suits, actions or proceedings and such person does not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought, then such person shall be obligated to reimburse us and our affiliates for all fees, costs and expenses of every kind and description, including but not limited to all reasonable attorneys’ fees and other litigation expenses, that the parties may incur in connection with such claim, suit, action or proceeding."); see also Form S-1, Cone Midstream Partners, LP, August 25, 2014, at 47; Prospectus, Westlake Chemical Partners LP, at 143.
For other examples, see Lannett Company, Inc., Current Report on Form 8-K, July 17, 2014; Echo Therapeutics, Current Report on Form 8-K, June 27, 2014 (the bylaw is here); The LGL Group, Current Report on Form 8-K, June 17, 2014; and Biolase, Inc., Current Report on Form 8-K, June 30, 2014.