Moelis lost on the merits, then won on appeal over timing

The record

On February 23, 2024, Vice Chancellor J. Travis Laster issued an opinion in West Palm Beach Firefighters' Pension Fund v. Moelis & Company holding that several provisions of a 2014 stockholders agreement between Moelis & Company and entities controlled by its CEO, Ken Moelis, were facially invalid under Section 141(a) of the Delaware General Corporation Law, which vests management of a corporation in its board except as the charter otherwise provides. The court found the agreement's pre-approval, board-recommendation, vacancy-filling, and board-size provisions invalid, while upholding a separate designation right, nomination requirement, and efforts requirement. On July 17, 2024, Delaware's General Assembly enacted a new Section 122(18) of the DGCL, effective August 1, 2024, authorizing the categories of stockholder contracts the court had invalidated, but stating the amendment would not apply to any proceeding pending on that date. On January 20, 2026, the Delaware Supreme Court reversed a related, earlier Chancery ruling in the same case, holding the claim was time-barred by laches, not by disagreeing with the Section 141(a) analysis.

What the documents establish

The merits opinion establishes what it invalidated and why: agreements letting a stockholder control specific board-level decisions, such as recommending its designees, filling vacancies with its own nominees, and capping board size, function as direct constraints on board authority and, absent a charter provision, are void under Section 141(a) as read there. The new Section 122(18), reproduced on Delaware's own Delaware Code site, authorizes a corporation to contract with stockholders to restrict board actions, require pre-approval of specified actions, or covenant to take or not take specified actions, language the bill's own synopsis, quoted in the Supreme Court's opinion, describes as providing “a different rule” than the Court of Chancery had applied. The 2026 opinion adds a third holding: the provisions were voidable rather than void, so laches could bar a claim accrued in 2014 and not filed until 2023, reached without relying on the statute's policy.

The operating read

Editorially, the sequence separates three events easy to conflate: a trial court's reading of Section 141(a) for pre-2024 agreements; a legislative fix authorizing similar terms going forward, without validating past agreements retroactively; and an appellate ruling resolving this case on timing, not by endorsing or rejecting the statutory reading. An agreement signed before August 1, 2024 is not automatically protected by Section 122(18), and a similar agreement is not automatically time-barred merely because this claim was.

What to check before you decide

Before relying on the Chancery opinion or the 2024 statute to assess a stockholder agreement, check the following:

• Was the agreement entered into before or after Section 122(18)'s effective date, and does its language track the statute's specific authorization?
• If a challenge to an older agreement is contemplated, how long has the challenger known of the provision, and does a laches-style delay already run against it?
• Does the provision restrict the board directly, or operate through a designation, nomination, or efforts mechanism the courts treated differently?

This describes what the opinion, the statute, and the reversal each state; it is not a conclusion about any other company's agreement.