Delaware Chancery Court
In a case followed closely by corporate governance experts, G&E won a huge governance settlement with media giant News Corp. regarding the contested extension of the company’s anti-takeover “poison pill” defense, written to defend against a takeover bid by Liberty Media. G&E represented a group of international institutional investors from Australia, the United States, the United Kingdom, and the Netherlands. After News Corp.’s motion to dismiss the case was denied, and just prior to the deposition of News Corp. Chairman and majority owner Rupert Murdoch, the company capitulated to the plaintiffs’ demands and agreed to put the controversial extension of the poison pill defense provision to a full shareholder vote at its next annual meeting. The company further agreed to 20 years’ worth of limitations on the Board of Directors’ ability to adopt poison pills. In addition, the Delaware Chancery Court ruled that shareholders may contractually limit board authority without amending the corporation’s charter. The ruling has been widely hailed as a milestone in corporate governance reform, particularly in light of the line of decisions analyzing, and, often upholding, unilateral amendment of bylaws by boards of directors.