Court of Chancery Upholds Advance Notice Bylaw
The Court of Chancery has upheld the use of a press release to announce a stockholder meeting date and to trigger the provisions of a ten day advance notice bylaw. The plaintiff's employees read the press release, which mostly focused on financial results, but they neglected to notice it also announced the annual meeting date. Thus, the plaintiff failed to get the names of its nominees to the company in the time required by a bylaw provision triggered by the notice of meeting.
The Court was troubled by the result because the notice was at the end of the press release. While this seemed a little sneaky, the Court did not invalidate the notice. As the Court pointed out, the time-honored rules against manipulating the voting process are not triggered by every act that affects that process. Only the more egregious actions will warrant relief. Hence, if you snooze, you will lose.
