On April 29, 2026, the Delaware Supreme Court in In re Aes Corp., sitting en banc, affirmed the Court of Chancery's dismissal of consolidated stockholder challenges to advance notice bylaws adopted by the AES Corporation (“AES”) and Owens Corning. Writing for a unanimous Court, Justice Abigail M. LeGrow held that the stockholders' as-applied equitable claims were unripe because no actual or threatened director nomination dispute existed.

Background

Both AES and Owens Corning revised their advance notice bylaws in 2023 following the SEC's adoption of Exchange Act Rule 14a-19, commonly known as the “universal proxy rule.” Board materials showed that each company considered how the universal proxy rule would lower barriers to stockholder activism and sought to strengthen its nomination framework in response. The amended bylaws shared several notable features: they designated the advance notice provisions as the exclusive means for stockholder nominations of directors; they authorized the board chair or presiding officer to disregard noncompliant nominations; they included broad "acting in concert" definitions as well as "daisy chain" provisions; and they imposed extensive ownership and relationship disclosure requirements on would-be nominators. 

Two stockholders filed separate suits challenging these amendments as defensive and entrenching. Following the Supreme Court's 2024 decision in Kellner v. AIM ImmunoTech Inc., which established the "twice-tested" framework for advance notice bylaws, the plaintiffs disclaimed facial-validity challenges and proceeded solely on equitable claims challenging the boards’ adoption of the bylaws. Critically, neither plaintiff intended to nominate directors or could identify a stockholder who presently intended to do so.

The Court's Analysis

The Court's opinion rested on a straightforward application of Kellner's ripeness requirement. The Court reaffirmed that advance notice bylaws are "twice-tested"—first for facial validity and second in equity—but emphasized that both forms of review require a dispute "that is ripe for judicial review." A dispute is not ripe when it rests on uncertain and contingent future events that may never occur. 

The Court drew a key distinction between facial and as-applied challenges. A facial challenge ripens upon adoption because it raises a purely legal question answerable from the governing documents. An as-applied equitable challenge, however, is situational and fact-bound, and ordinarily becomes justiciable only when a real nomination controversy exists—when a stockholder has stepped forward to nominate or credibly threatened to do so—so that a court can assess the bylaw's operation on a concrete record. 

The Court considered and rejected the stockholders' deterrence theory. The plaintiffs argued that the bylaws functioned as deterrents from the moment of adoption, suppressing activism before it could materialize, and that requiring an identified would-be nominator created an impossible "Catch-22." The Court acknowledged that Delaware courts have credited deterrence as a present harm in limited contexts—such as the poison pill in Williams, the fee-shifting bylaw in Solak, and the proxy put in Pontiac—where the challenged device imposed self-executing, economically coercive consequences. But advance notice bylaws principally impose procedural and disclosure obligations, not automatic economic penalties, and their effect depends on how they would operate in a concrete nomination setting. 

The Court also rejected the stockholders' policy argument that deferring review would allow aggressive "clear day" advance notice bylaws to evade challenge because no proxy contest may materialize within the limitations period, noting that, under the Court’s Moelis decision, as-applied challenges remain available even after the period for bringing facial challenges has passed.

Finally, the Court held that Rule 12(b)(1) was an appropriate vehicle for dismissal. The Court reasoned that the ripeness defect was antecedent to the merits, not intertwined with them, distinguishing the case from Appriva, and, in any event, the result would not change under Rule 12(b)(6).    

The Door Left Open

Importantly, the Court declined to hold that an as-applied challenge to advance notice bylaws can never proceed absent an identified would-be nominator. The Court suggested that circumstances might exist where such a challenge could proceed—for instance, “where the challenged bylaws operation imposes concrete, present burdens on stockholder conduct untethered to any nomination attempt,” or where “a would-be challenger can plead non-conclusory facts regarding the real-world deterrent effect of a particular provision.”

The Court also emphasized that stockholders are not left powerless in the meantime. They may vote against directors, propose bylaw amendments, wage "withhold" campaigns, and use Section 220 of the DGCL to investigate the board's process, and, if they do nominate directors, the necessary "real-world and extant dispute" required by Kellner will exist.

Key Highlights

• En banc affirmance. All five Justices joined the opinion affirming the Court of Chancery's dismissal.
• As-applied challenges require a concrete dispute. Equitable review of advance notice bylaws ordinarily becomes justiciable only when a stockholder has attempted or credibly threatened a nomination—not upon adoption alone.
• Deterrence theory rejected on these facts. Unlike poison pills, fee-shifting bylaws, or proxy puts, advance notice bylaws impose procedural and disclosure obligations rather than self-executing economic penalties, and their alleged chilling effect does not by itself create a ripe dispute.
• Facial vs. as-applied distinction reinforced. Facial challenges ripen upon adoption; as-applied equitable challenges require a developed, adversarial record with identifiable consequences.
• Limitations-period concerns addressed. As-applied challenges remain available even after the period for facial challenges expires, per Moelis.
• The door remains open. The Court reserved the question whether an as-applied challenge could proceed absent an identified would-be nominator in different circumstances, such as where non-conclusory facts establish real-world deterrent effects.
• Stockholder remedies preserved. Even without a ripe enforcement dispute, stockholders retain familiar tools: voting, bylaw proposals, "withhold" campaigns, and Section 220 books-and-records demands.