In its seminal decision on March 6, 2017 regarding EMC’s merger with Dell, IBEW Local No. 129 v. Tucci, the Supreme Judicial Court clarified the question of directors’ fiduciary duty under Massachusetts corporate law and resolutely distinguished the law of Massachusetts in this area from the law of Delaware.
The just-released 2017 Edition of Massachusetts Laws Governing Business Entities includes a special section with in-depth analysis of the impact of the case and the duties now required of Massachusetts corporate directors, as well as the full text of the cases related to the decision. The analysis was prepared by attorneys Thomas J. Dougherty and Kurt W. Hemr of Skadden, Arps, who represented EMC and its directors in the subject action:
“By its decision in the EMC case, the Supreme Judicial Court affirmed that directors of widely-held Massachusetts corporations have a single fiduciary duty to act in the best interests of the corporation under c. 156D, Section 8.30. For that reason, all shareholder challenges to such directors’ fulfillment of their fiduciary duty are derivative claims, requiring pre-suit demand on the corporation that such action be pursued, and pre-suit evaluation of that demand by the corporation under c. 156D, Sections 7.41-.47.
The Court reiterated that directors of closely-held Massachusetts corporations have additional shareholder-based fiduciary duties to shareholders, as do directors of majority controlled Massachusetts corporations when acting in majority self-interest with respect to minority shareholders. For that reason, whether a shareholder challenge to such directors’ conduct is a derivative or direct claim depends on whether the director allegedly breached a duty owed to the corporation or the shareholder, or to both.”
In this way, the authors note, Massachusetts law is differentiated from Delaware’s in that it declines to adopt Delaware’s director duty and shareholder challenge precepts.
Massachusetts Laws Governing Business Entities
CSC®’s Massachusetts Laws Governing Business Entities is the most comprehensive collection of annotated Massachusetts business statutes available.
The 2017 Edition is updated through Chapter 24 of the 2017 Massachusetts legislative session and features all the latest amendments to the Massachusetts business law, as well as over two dozen new case annotations from Massachusetts courts. Also included are five full-text cases covering recent legal developments regarding creation of a partnership, attorney conflicts of interest, the contemporaneous ownership requirement, covenants of good faith and fair dealing, and shareholder access to corporate records.
Other features include the Massachusetts Business Fee Schedule and a companion CD-ROM containing more than 160 Massachusetts forms for incorporation/formation, qualification, mergers, dissolution, and name reservation for all entity types. A listing of the forms and contact information for the Massachusetts Division of Corporations can be found in Appendix C.
Massachusetts Laws Governing Business Entities is available as a softbound book or as an ebook, compatible with dedicated e-reader devices, computers, tablets and smartphones that use e-reader software or applications. It is also available on the LexisNexis Digital Library.
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To learn more about the 2017 Edition of Massachusetts Laws Governing Business Entities, call 1.800.533.1637 or visit us online at www.lexisnexis.com/csc.