Delaware’s chancery decisions have always stood out from the other 49 states in the union. There are some very lax rules in regards to incorporation, and there is new buzz about clarification from the Delaware Supreme Court. For cases involving shareholder litigation, the court ruled that a private or public Delaware company can amend its bylaws to create provisions that requires the loser to pay the litigation costs of the other side.
In addition, the company would be allowed to do this even in the middle of a dispute, and enforce this if the plaintiff was only marginally successful.
We recommend any company doing business in California that is registered in Delaware take a look at this in-depth New York Times article on the matter.
Make sure that you speak with an experienced business or real estate attorney before taking any action. This is post should not be construed as legal advice, and is for information/reference purpose only.