Who Can Bring an Action Under Section 225?
  • Shareholders (both record holders or beneficial holders)
  • Directors (incumbent and putative)
  • Officers (only if his or her own title to office is in dispute)
  • Members of a corporation having no stock
How Quickly Can a Petitioner Expect To Get a Resolution After Filing a Section 225 Action?Section 225 actions are summary in nature, and thus the Court of Chancery hears such a case on an expedited basis. These cases, depending on the issues raised in them, are heard within two to four months of filing the action.

Is There Any Protection Against Dissipation of Assets by the Incumbent Management While the Case Is Pending?

While a Section 225 case is pending, the parties usually enter into a status quo order that prevents the incumbent director, officer or member of a governing body from taking actions outside the ordinary course of business. Such orders are typically agreed to among the parties prior to appearing before the Court, but sometimes when the parties cannot agree, the Court on its own enters such an order.

If you would like to speak to a litigator in Fox Rothschild’s Delaware office, please reach out to Sid Liebesman (302) 622-4237 or Seth Niederman (302) 622-4238.