Shareholder Consent Is The Key To Forum Selection

Law360 (February 9, 2011, 5:39 PM EST) -- Almost a year ago, the Delaware Court of Chancery opined in dictum that if a company’s board and shareholders thought derivative actions would best be litigated in a particular forum, the company would be “free” to adopt an appropriate venue provision in its charter. See In re Revlon Inc. Shareholders Litig., 990 A.2d 940, 960 & n.8 (Del. Ch. 2010).

The court specifically suggested such provisions as potential correctives to attempts by “entrepreneurial ... frequent filers” to avoid bringing suit in jurisdictions where their litigation tactics would be subject to greater judicial oversight. See id. at 960. While policing frequent filers...

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