The Delaware State Bar Association will consider a proposed amendment to the DGCL that would limit the decision of the Delaware Supreme Court in ATP Tour to non-stock corporations. As discussed in Legal Update, ATP Tour: Delaware Supreme Court Upholds Fee-shifting By-laws if Adopted for Proper Purpose, the court validated fee-shifting by-laws for non-stock corporations if adopted for equitable purposes. Given the statutory basis of the decision, its holding could be presumed to apply to ordinary stock corporations as well. A fee-shifting by-law would allow Delaware corporations to require the loser of an intra-corporate lawsuit to pay the corporation's attorney expenses. The proposed amendment to the DGCL would amend Section 102(b)(6) and add a new Section 331 to clarify that these costs cannot be borne by stockholders of stock corporations.

The proposed legislation is expected to be presented to the Delaware General Assembly for passage before the end of the current legislative session on June 30, and, if passed, would become effective on August 1, 2014.