DE Bar Specific Law 2 — Questions and Answers
Question 1: Under the Delaware General Corporation Law (DGCL), what vote is generally required for stockholders to approve a merger?
- Two-thirds of all outstanding shares
- A majority of shares present at the meeting
- Unanimous written consent of all stockholders
- A majority of the outstanding shares entitled to vote (Correct answer)
Correct answer: A majority of the outstanding shares entitled to vote
DGCL Section 251 requires approval by a majority of the outstanding stock entitled to vote on the merger.
Question 2: Which Delaware court has exclusive original jurisdiction over most equitable claims, including fiduciary duty disputes involving corporations?
- The Justice of the Peace Court
- The Court of Common Pleas
- The Court of Chancery (Correct answer)
- The Superior Court
Correct answer: The Court of Chancery
The Court of Chancery is Delaware's court of equity and hears fiduciary duty and other equitable corporate disputes.
Question 3: Under DGCL Section 102(b)(7), a Delaware corporation's charter may exculpate directors from personal liability for breaches of which duty?
- The duty of loyalty
- All fiduciary duties without exception
- The duty of good faith
- The duty of care (Correct answer)
Correct answer: The duty of care
Section 102(b)(7) permits exculpation only for duty of care breaches, not loyalty or bad faith conduct.
Question 4: In Delaware, a stockholder demanding to inspect corporate books and records under DGCL Section 220 must state what?
- A pending lawsuit against the corporation
- Approval from the board of directors
- A proper purpose reasonably related to their interest as a stockholder (Correct answer)
- Ownership of at least 5% of outstanding shares
Correct answer: A proper purpose reasonably related to their interest as a stockholder
Section 220 requires the stockholder to demonstrate a proper purpose reasonably related to their interest as a stockholder.
Question 5: What is the default standard of review Delaware courts apply to disinterested board decisions?
- Entire fairness review
- Enhanced scrutiny under Unocal
- Strict scrutiny
- The business judgment rule (Correct answer)
Correct answer: The business judgment rule
Absent conflicts or special circumstances, Delaware courts presume directors acted on an informed basis and in good faith under the business judgment rule.
Question 6: Under Delaware law, a holographic (entirely handwritten but unwitnessed) will is:
- Valid if signed by the testator
- Valid if notarized
- Valid only for estates under $50,000
- Invalid, because Delaware requires two witnesses for all wills (Correct answer)
Correct answer: Invalid, because Delaware requires two witnesses for all wills
Delaware does not recognize holographic wills; a valid will must be in writing, signed, and attested by two witnesses.
Question 7: The statute of limitations for most personal injury actions in Delaware is:
- Three years
- One year
- Two years (Correct answer)
- Six years
Correct answer: Two years
Under 10 Del. C. Section 8119, personal injury claims must be brought within two years of the injury.
DE Bar Specific Law 2
Under the Delaware General Corporation Law (DGCL), what vote is generally required for stockholders to approve a merger?