Posted by Joseph E. Bachelder, McCarter & English LLP, on Wednesday, June 22, 2016
Editor's Note: Joseph E. Bachelder is special counsel in the Tax, Employee Benefits & Private Clients practice group at McCarter & English, LLP. The following post is based on a column by Mr. Bachelder which first appeared in the New York Law Journal. Andy Tsang, a senior financial analyst with the firm, assisted in the preparation of this column. Related research from the Program on Corporate Governance includes Golden Parachutes and the Wealth of Shareholders by Lucian Bebchuk, Alma Cohen, and Charles C. Y. Wang (discussed on the Forum here). This post is part of the Delaware law series; links to other posts in the series are available here.
Yahoo! Inc. paid its Chief Operating Officer (COO) just under $100 million for 14 months work (November 12, 2012–mid-January 2014). This compensation/severance arrangement is the subject of a recent opinion by the Delaware Court of Chancery and is the subject of this post.
The Amalgamated Bank Case
On February 2, 2016, the Delaware Court of Chancery granted a demand by Amalgamated Bank to inspect the books and records of Yahoo pursuant to Section 220 of the Delaware General Corporation Law (DGCL). Amalgamated Bank v. Yahoo! Inc., 132 A.3d 752 (Del. Ch. 2016). Amalgamated made this demand in connection with its investigation into the circumstances associated with the hiring and firing of the Yahoo COO, Henrique de Castro.