What is the main change in Marriott's bylaws according to this 8-K filing?

The primary change is the addition of a new article that designates the Delaware Court of Chancery as the sole and exclusive forum for resolving most "internal corporate claims." This means lawsuits concerning duties of directors, officers, employees, or stockholders, or other matters under Delaware corporate law, must be filed in Delaware.

Why would Marriott implement a "forum selection clause"?

Companies often implement forum selection clauses, especially those incorporated in Delaware, to ensure that internal corporate disputes are heard by a court that is highly specialized in corporate law, like the Delaware Court of Chancery. This can lead to more consistent rulings, potentially faster resolution, and reduce the likelihood of litigation being filed in inconvenient or less experienced jurisdictions.

Does this change affect my ability to sue Marriott?

This amendment dictates *where* you must file certain types of lawsuits against Marriott, specifically "internal corporate claims" as defined in the bylaws. If your claim falls under this definition, you will generally be required to file it in a Delaware state court (specifically the Court of Chancery, if it has jurisdiction) or another Delaware court if the Court of Chancery does not. It does not prevent you from pursuing valid claims, but it restricts the location.

Is this a common practice for publicly traded companies?

Yes, forum selection bylaws are increasingly common among publicly traded companies incorporated in Delaware. Many large corporations have adopted similar provisions to achieve the benefits of specialized corporate litigation in Delaware.

MAR 8-K: Corporate Changes

Summary

Marriott International, Inc. (MAR) filed an 8-K on August 13, 2019, reporting a significant amendment to its corporate governance. The Board of Directors adopted new bylaws, designating the Delaware Court of Chancery as the sole and exclusive forum for resolving internal corporate claims. This means lawsuits related to a director's, officer's, employee's, or stockholder's duties or other matters under Delaware law must be filed in Delaware courts. This move is a common strategy among Delaware-incorporated companies to streamline litigation and ensure disputes are handled by a court with specialized expertise in corporate law. For investors, this amendment signals a potentially more predictable and efficient legal process for corporate disputes involving Marriott. It does not alter the company's operational or financial performance directly but aims to protect the company and its stakeholders by standardizing the venue for legal challenges.

Key Highlights

1Marriott International amended its bylaws to establish a "forum selection clause."
2The Delaware Court of Chancery is designated as the sole and exclusive forum for most internal corporate claims.
3This applies to claims involving violations of duties by directors, officers, employees, or stockholders.
4The amendment also covers claims over which the Delaware General Corporation Law confers jurisdiction upon the Court of Chancery.
5The bylaws were amended on August 8, 2019, and the amendment was effective immediately.
6This action aims to centralize and streamline the handling of corporate litigation.
7The amendment does not impact current financial statements or operational performance but affects the legal venue for future disputes.

MARRIOTT INTERNATIONAL INC /MD/ 8-K Report, Bylaw Amendment (Aug 14, 2019)

Summary

Key Highlights

Frequently Asked Questions