"Our Corporations Are The World’s Leaders For A Reason" Featuring Ryan McLeod & Dan Neff, Wachtell, Lipton, Rosen & Katz

C.O.B. Tuesday

Many of you have likely noticed, as we have, some of the news coming out of Delaware about certain rulings, the debate around those rulings, and the subsequent debate around actions taken by the legislature to clarify Delaware law. As we’ve read about these developments, we were intrigued and turned to the team at Wachtell, Lipton, Rosen & Katz (WLRK) for their thoughts on these matters. We were extremely pleased to have Ryan McLeod, Partner, and Dan Neff, Partner and Member of the Executive Committee, join us for a far-ranging and intriguing discussion on these issues.
Ryan joined WLRK in 2013 and specializes in representing corporations and directors in litigation involving mergers and acquisitions, proxy contests, corporate governance disputes, and class and derivative actions involving allegations of breach and fiduciary duty. He also serves as a Lecturer in Law at Columbia and has extensive experience litigating corporate matters in the Delaware Court of Chancery and the Delaware Supreme Court. Dan has over four decades of experience advising major companies in high-profile transactions and served as WLRK’s Co-Chairman for 20 years through October 2023. He specializes in mergers and acquisitions, corporate governance, and securities law and has represented clients in a broad range of industries including energy, technology and telecom, chemicals, pharmaceuticals, manufacturing/industrials, retail/consumer products, gaming, and more.
In our conversation, Ryan first provides perspective on Delaware’s importance to corporate law and the large percentage of companies that are incorporated there. Ryan walks us through three specific legal rulings that prompted amendments in Delaware including the Twitter stockholder litigation, the Activision merger case, and a case involving contractual governance and shareholder veto rights. We discuss the significant and unique amount of public debate surrounding these amendments, the practical impact of Delaware rulings on corporate governance, particularly in activist settlements and private equity deals, and the implications for boards and corporate lawyers. We also touch on whether these developments might lead boards to become more cautious in decision-making, the historical context of Delaware appraisal cases, and changing complexities around CEO compensation. We explore the Caremark Doctrine’s increasing relevance in corporate governance, the complexity of preparing board minutes to show transparency and thoroughness without over-disclosing, and emerging corporate governance risks. Ryan and Dan also share their insights on what sets Delaware law apart from other states, how companies manage external pressures from activism, the future of corporate governance, and much more. Thank you, Ryan and Dan, for sharing your insights and expertise with us all! We learned a tremendous amount.
Mike Bradley kicked us off with a few updates. He noted that the FED’s 50-basis point rate cut was initially received well, but since then, most markets have traded sideways. On the bond market front, the 10-year U.S. bond yield actually increased as the rate cut was mostly expected. He noted consensus around additional rate cuts in 2024 and 2025. He also noted that the 2yr/10yr bond yield spread widened to ~20-basis points after being inverted for the past two-plus years. On crude oil, WTI price has traded sideways this week (~$71/bbl) and Mike discussed several positive developments which could temporarily be supporting crude oil prices including a Chinese stimulus program, continued historic “net short” length in Brent futures and growing Mideast conflict. OPEC published its annual World Oil Outlook this week (linked here) and again raised its global oil demand estimates (~113mmbpd for 2030 & ~120mmbpd for 2050) which is well above the view of many others. He then flagged that this week is Climate Week in N