## Facts

- Datapoint Corporation was a Delaware corporation whose charter contained no provision regulating stockholder action by written consent.
- Asher B. Edelman, through Plaza Securities Company and Arbitrage Securities Company, controlled more than 10% of Datapoint’s stock and sought corporate control.
- After the board rejected Edelman’s acquisition proposals, Edelman indicated he would solicit stockholder written consents to remove the incumbent board and elect a new slate under 8 Del. C. § 228.
- Datapoint’s board adopted a bylaw intended to regulate written-consent actions, with the stated purpose of providing management additional time to consider alternatives.
- The bylaw required (i) a board-set record date 15 days after notice of an intent to solicit consents, (ii) a 45-day waiting period after the record date before consent action could be taken, and (iii) postponement of effectiveness of consent action until related litigation ended.
- Plaza and Arbitrage sued in the Court of Chancery to enjoin enforcement of the bylaw as inconsistent with § 228.
- The Court of Chancery preliminarily enjoined enforcement, holding the bylaw conflicted with § 228; Datapoint took an interlocutory appeal.

## Issues

1. Whether a board-adopted bylaw that imposes substantial timing and litigation-based delays on stockholder action by written consent is valid under 8 Del. C. § 228.
2. Whether such a bylaw impermissibly conflicts with, or effectively nullifies, the statutory power granted to stockholders to act by written consent in lieu of a meeting.

## Decision

- The Delaware Supreme Court affirmed the preliminary injunction.
- The court held the bylaw invalid because it directly conflicted with the stockholder power conferred by 8 Del. C. § 228.
- The court concluded that the bylaw’s mandatory record-date and waiting-period requirements, and its litigation-linked postponement of effectiveness, materially interfered with § 228’s consent mechanism.

## Legal Principles

- Under 8 Del. C. § 228, stockholders may take, by written consent, any action that could be taken at a meeting, without a meeting, without prior notice, and without a vote, if the required number of shares consent.
- Director-adopted bylaws under 8 Del. C. § 109 must be consistent with the DGCL and the corporation’s certificate of incorporation.
- A bylaw is invalid if it directly conflicts with a statute or purports to curtail, condition, or nullify a statutory stockholder right where the statute does not impose those conditions.
- Procedural regulation may be permissible in the abstract, but measures that materially delay or restructure the statutory consent process beyond § 228’s framework are not.

## Conclusion

The Delaware Supreme Court held that Datapoint’s board could not use bylaws to impose substantial delays and litigation-conditioned effectiveness on stockholder action by written consent, because such restrictions conflicted with the statutory right granted by 8 Del. C. § 228.


Datapoint Corp. v. Plaza Sec. Co., 496 A.2d 1031 (Del. 1985)