Shareholders including a police and fire pension fund and an investment club sued the Delaware corporations separately this year with the same lawyers challenging directors’ authority to make such decisions.
The plaintiffs failed “to prove their point by presenting to this court a number of hypothetical situations in which, they claim, the bylaws might operate inconsistently with law, or unreasonably,” Chief Judge Leo Strine Jr. said in a 49-page opinion released today. He concluded that that the challenged bylaws are valid and enforceable.
The ruling “will provide efficiency benefits” to “other corporations and their investors” as well, Strine wrote.
Jim Craig, a spokesman for San Ramon, California-based Chevron, and Jess Bunn, a spokesman for Memphis, Tennessee-based FedEx, didn’t immediately respond to e-mail messages seeking comment on the ruling.
Plaintiffs’ lawyer Marc A. Topaz didn’t immediately respond to a phone message seeking comment.
The cases are Boilermakers v. Chevron, CA7220, and IClub v. FedEx, CA7238, Delaware Chancery Court (Wilmington).
To contact the editor responsible for this story: Michael Hytha at email@example.com