Media Reports on Appeal to Delaware Supreme Court to Revive Suits Regarding Weaponized Advance Notice Bylaws

Multiple media outlets, including Law360 (subscription required), Delaware Business Court Insider (subscription required) and Bloomberg Law (subscription required), have reported on the appeal to the Delaware Supreme Court by Olshan clients George Assad and Martin Siegel, represented by Lori Marks-Esterman, Chair of Olshan's Litigation Practice Group and Head of Olshan’s Shareholder Activism Litigation Practice, and counsel Jacqueline Y. Ma.

Siegel and Assad, shareholders of The AES Corporation and Owens Corning, respectively, brought separate actions alleging that the corporations adopted extreme advance notice bylaws to deter stockholder nominations due to concerns that Universal Proxy Rule would make it easier for stockholders to gain board seats. They urged the Delaware Supreme Court to revive their suits after the Delaware Court of Chancery dismissed them as unripe in April and June 2025 because no stockholder had attempted or planned to nominate directors. Arguing that claims against the director defendants accrued when they passed draconian bylaws for defensive purposes, Lori said that the Delaware Court of Chancery wrongly treated the claims as speculative.  The Boards’ intent in adopting the advance notice bylaws is “fixed, it is historical and static,” Lori explained to the court, and the bylaws, which contain expanded acting in concert definitions, wolf pack and daisy chain provisions, are in effect now and impact all stockholders, not only after a proxy contest is triggered.  She said the bylaws impose immediate deterrent effects on stockholders contemplating a proxy contest, even if no nomination is ultimately submitted. When asked whether this gives plaintiffs two bites at the apple, Lori explained it did not. Adoption claims challenge the board’s intent in adopting the bylaws, and proportionality under enhanced scrutiny, while enforcement challenges presume the bylaws’ validity and focus on their application to a specific stockholder’s nomination. Lori concludes that making a live proxy contest a condition to equitable review of advance notice bylaws “creates a perverse gap in Delaware fiduciary law. Boards can adopt entrenching bylaws, immediately chill stockholder communications and nominations and yet evade twice tested equitable review. This is not and cannot be the law in Delaware.”