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If nothing else, no one can accuse Delaware of dillydallying. Governor John Carney signed into law hotly debated Delaware Corporate Law amendments. Starting August 1, companies can enter into agreements that provide shareholders with certain levels of corporate decision-making power, which would otherwise require a shareholder vote. Legal minds such as Charles Elson, Travis Laster and many academics have been outspoken critics of the bill, but others believe it resolves uncertainty in Delaware.
A Diligent article this week gleaned a potential upside for activists coming out of SB 313, writing that the Moelis ruling (the impetus for the bill) has been viewed by activists as a threat to existing activist agreements with companies – a major instrument in their playbooks – with one activist saying that companies could use it “as a legal backing to complain about things that activists are asking for.” With the Moelis decision effectively reversed, that is no longer a concern, but The Deal’s Jean Haggerty reports that some shareholder groups believe these amendments may open the door to share class changes, making it more difficult for activists to gain company control.
The courts appear to increasingly serve as a battleground between activists and corporates. In this week’s episode of Hatfields and McCoys, medtech company Masimo sued Politan, the repeat activist investor seeking to replace two of Masimo’s directors for the second year in a row, claiming it misled shareholders in its proxy materials. The same day, Masimo pushed its annual meeting from July 25 to September 19, triggering a countersuit from Politan. These actions came in the wake of an ISS report that recommended shareholders vote for Politan’s nominees.
Below is our continuing list of fun things to do in New York City, including the launch of Restaurant Week next week.
Have a great weekend,
GPP team
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