Four years ago, in March 2020, the Delaware Supreme Court issued a landmark ruling in Salzberg v. Sciabacucchi, 227 A.3d 102 (Del. 2020). In it, the court upheld the validity of provisions included in a Delaware corporation's certificate of incorporation that require shareholders of that corporation to sue in federal court, rather than state court, over alleged violations of the Securities Act of 1933 (the Securities Act); these claims arise most frequently in the initial public offering (IPO) context. These provisions, referred to as federal forum provisions (FFPs) are essentially contractual provisions between a corporation and its shareholders.
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Originally Published by New York Law Journal, 27 March 2024
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