AES and Owens Corning secure Delaware Supreme Court decision unanimously affirming dismissal of stockholder-plaintiffs' challenges to their directors' adoption of advance notice bylaws
Client(s) The AES Corporation; Owens Corning
Jones Day secured a Delaware Supreme Court decision affirming dismissal of stockholder-plaintiffs' challenges to the adoption of advance notice bylaws by the boards of The AES Corporation and Owens Corning. The challenged bylaws require a stockholder to disclose certain information when making a nomination, and the plaintiffs alleged that the bylaws deter nominations.
The Delaware Court of Chancery dismissed the complaints as unripe. Because the plaintiffs did not intend to nominate a director to the board and were not aware of any stockholder who so intended, there was no genuine, extant controversy to support equitable review of the plaintiffs' claims. The plaintiffs appealed and the Delaware Supreme Court heard the appeal sitting en banc. After briefing and argument, the Delaware Supreme Court, in a unanimous published opinion, affirmed dismissal. The Court confirmed that the plaintiffs' claims were “abstract” and noted that “any ruling on whether these bylaws operate inequitably would amount to an advisory opinion based on hypotheticals about how the bylaws might function or be applied in future nomination disputes.”
This is a significant win for not only AES and Owens Corning, but for all Delaware corporations, as this decision reinforces that judicial review is unavailable for unripe, abstract, hypothetical claims.
In re The AES Corporation and Owens Corning, No. 218, 2025, --- A.3d ----, 2026 WL 1155111 (Del. Apr. 29, 2026) (affirming Siegel v. Morse, No. 2024-0628-NAC, 2025 WL 1101624 (Del. Ch. Apr. 14, 2025) and Assad v. Chambers, No. 2024-0688-NAC, 2025 WL 1554609 (Del. Ch. June 2, 2025))
