Lori Marks-Esterman Quoted in the Deal on Delaware Court of Chancery’s Dismissal of Acting-in-Concert Bylaw Challenge

Lori Marks-Esterman, Chair of Olshan's Litigation Practice Group and Head of Olshan’s Shareholder Activism Litigation Practice, was quoted in an article in The Deal (subscription required) on the recent dismissal by the Delaware Court of Chancery’s Chancellor Kathleen McCormick of a lawsuit filed by a shareholder of Better Home & Finance Holding Co. concerning the company’s implementation of an “acting-in-concert” bylaw for when activists nominate dissident directors. Chancellor McCormick wrote that “The Plaintiff successfully demonstrated that the challenged bylaw is long, broad and overly complicated. But the plaintiff has not demonstrated that the bylaw cannot operate lawfully under any set of circumstances.” Lori explains that the Better Home case is a "facial validity" challenge, which is difficult to demonstrate because it requires proof that a bylaw can't operate lawfully under any circumstances. The court "could only review the bylaws at issue on facial invalidity,” she said, “which the Delaware Supreme Court made clear is a very high bar. The court can't look at reasonableness or proportionality."