Fordham Law students got an up-close look at a jurist from one of the most consequential state courts adjudicating high-stakes business disputes and corporate governance matters, with a visit and lecture from J. Travis Laster, vice chancellor of the Delaware Court of Chancery.
Vice Chancellor Laster joined Fordham on March 26 to give the 22nd Annual Albert A. DeStefano Lecture on Corporate, Securities, and Financial Law. The Delaware Court of Chancery is the nation’s preeminent forum for business law disputes. Laster was sworn in as a vice chancellor in 2009 after nearly fifteen years in private practice, first as an associate and then a director with Richards, Layton & Finger P.A., and then as founding partner of Abrams & Laster LLP.
Laster previously gave the DeStefano Lecture in 2013 and took pride in being asked back. “Some might question Fordham’s judgment,” he said, “but I am grateful.” During his second trip to the DeStefano podium, he spoke about a particularly timely topic: the test for a controlling shareholder. But rather than discussing Delaware law on the topic, Laster surveyed definitions that appear in federal and state statutes in search of a consensus approach.
The DeStefano Lecture, presented annually by the Corporate Law Center (CLC), hosts policymakers, members of the judiciary, and distinguished attorneys to discuss developments in business law. The lecture series was named in honor of Albert A. DeStefano ’47, who taught corporate acquisitions as an adjunct professor at Fordham Law and dedicated his prolific career in law to serving others.
Laster’s visit came at an historic moment for the Delaware Court of Chancery. The court was recently in the national spotlight when it ruled that Elon Musk’s $56 billion pay package must be rescinded due to deficiencies in the board approval process. In response, Musk moved Tesla’s site of incorporation from Delaware to Texas, and he has been encouraging other companies to do the same—a movement dubbed “DExit.”
Delaware’s state budget relies on corporate franchise taxes and other fees from its 2.2 million incorporated businesses. To respond to the threat, Senate Bill 21 (SB 21) was introduced with the goal of making the state more attractive by reducing the litigation risk associated with conflict transactions. The bill proposed statutory safe harbors which, if met, eliminate the ability of a court to grant monetary relief or impose an equitable remedy. One part of the bill introduced a definition of who counts as a controlling shareholder. On March 25, the day before the DeStefano lecture, the House of Representatives voted in favor of SB 21. The governor immediately signed it, and the bill became law.
Rather than examining SB 21, Laster surveyed definitions of control found in federal and state securities laws, public utility company laws, and banking laws. He identified ways that the SB 21 definition differs from other statutory definitions and posited that the divergence could have significance.
In response to a question after his speech, Laster highlighted the difference, as he sees it, between the role of a judge versus the role of lawmakers. Noting that “it makes absolute sense for the political branches to be creating a product that they think is attractive to particular constituents,” Laster argued that judges should not be deciding cases based on who the parties are. He maintained that judges should be “applying the rule of law, not the rule of whom.”
“Vice Chancellor Laster’s lecture was a true highlight of the year for the Corporate Law Center. His presentation on the definition of ‘control’ found in other areas of the law raises important questions about how the definition is evolving in Delaware. Vice Chancellor Laster’s keen intellect and dedication to the law came through not only in his formal lecture, but also in conversation with students, faculty, and alumni during his much-appreciated day-long visit to our School,” said Amy Martella ’07, CLC Director.
Earlier in the day, the Center for Judicial Events & Clerkships (CJEC) hosted a talk titled the View from Chambers: the Delaware Court of Chancery. The View from Chambers series is a part of the CJEC’s judicial engagement through education initiative that welcomes judges from specialty courts to speak with the Fordham Law community, providing unique insights into the work of their court (such as duties and powers), emerging topics of interest, the role of judges and clerks in those courts, and the path to becoming a judge in that court.
During his talk on the view from his chambers, Laster gave a brief history of the Court of Chancery and an overview of its jurisdiction. After that, Martella and CJEC Assistant Dean Suzanne M. Endrizzi ’96 moderated a discussion. Laster and his two clerks provided insights to those who might seek clerkships on the Court of Chancery.
“Chancery is not for the faint hearted,” said Laster. “If what you want is an intense experience, if you want to dial yourself back to that first semester of law school where everyone was really excited about what they were doing and everyone was motivated, and your learning curve was near vertical because so much of it was new, and if you want to work with people who are super committed to trying to get it right and to doing a good job, then [a Chancery clerkship]might be a good fit.”
“We were delighted to partner with the Corporate Law Center on Vice Chancellor Laster’s visit. It was a unique opportunity for our community to learn firsthand about the important work of the Delaware Court of Chancery, especially at this pivotal point in Delaware corporate law,” said Endrizzi.
