How Galaviz V. Berg Affects Forum Selection Bylaws

Law360, New York (March 31, 2011, 12:53 PM EDT) -- In the past year, a number of companies have amended their bylaws to require that shareholder derivative lawsuits are resolved in the Delaware Chancery Court. This recent spike in the use of company-friendly forum selection clauses comes at a time when lawsuits challenging mergers are rampant. According to Reuters, such lawsuits have tripled from 107 in 2007 to 335 in 2010, despite a decrease in deal volume.

Such forum selection clauses serve a few purposes. First, they prevent companies from having to defend actions in multiple...
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