June 16 — A director of a Delaware corporation need not provide written notice of his or her resignation from the entity's board, the Delaware Supreme Court affirmed June 12 .
Rather, Chief Justice Leo Strine Jr. agreed with the chancery court that 8 Del. C. §141(b) “is a permissive statute” that does not require a resignation to be in writing.
In a dispute over the control of Biolase Inc., a dental surgery company, Paul Clark was appointed to the Biolase board after previous director Alexander Arrow orally announced his resignation at a Feb. 28 board meeting. Both Arrow's resignation and Clark's appointment were planned by Biolase Chairman and Chief Executive Officer Federico Pignatelli, the court recapped.
Although Pignatelli initially said he was “thrilled” by Clark's appointment, the court continued, he “quickly reversed course” upon learning that Clark had aligned himself with a faction of the board that sought to remove Pignatelli from his position as CEO. According to the court, Pignatelli then argued that because Arrow resigned orally rather than in writing, Clark was not properly appointed to the board.
The chancery court concluded that there is no requirement that a resignation be in writing; as such, it held that Arrow resigned at the Feb. 28 meeting and was immediately replaced by Clark.
Concluding that the ruling was supported by substantial evidence, the state high court affirmed.
To see the decision, go to http://www.bloomberglaw.com/public/document/Biolase_Inc_v_Oracle_Partners_LP_No_270_2014_2014_BL_165101_Del_J.
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