Delaware – Ratification of Defective Acts

Nguyen v. View, Inc., C.A. No. 11138 (Del. Ch. 6/6/17). The Delaware Chancery Court ruled that Sec. 204 could not be used to validate actions taken by a corporation in pursuing a round of preferred stock financing that was declared void because the majority stockholder revoked his consent to the financing transaction.  This was not a failure of authorization.  It was an express rejection of a corporate proposal in a situation where that authorization was required.  Failures of authorization can be ratified pursuant to Sec. 204.  Rejections of authorization cannot.