COVID-19 Measures Should Not Threaten Shareholder Rights

Law360 (subscription required) published an article based on a recent client alert by Olshan’s Shareholder Activism Practice. Entitled “COVID-19 Measures Should Not Threaten Shareholder Rights” and authored by partners Steve Wolosky, Andrew Freedman, Adrienne Ward and Ron Berenblat, the article discusses an amendment advocated by certain factions within the Delaware State Bar Association to Section 110 of the Delaware General Corporation Law that would allow Delaware corporations to postpone their annual meetings of stockholders in light of the COVID-19 pandemic. In a previous client alert, the authors expressed serious concerns that the proposed amendment could be abused by corporations looking to postpone their annual meetings and disenfranchise stockholders under the pretense that such a delay is required due to COVID-19. On April 6, Delaware Governor John Carney issued the tenth modification to his State of Emergency Declaration relating to COVID-19 intended to reduce the number of in-person stockholder meetings held by Delaware corporations in order to protect the health and safety of the civilian population in light of the pandemic. In the Law360 article, the authors express their view that the Governor's order is sufficient to allow corporations to address COVID-19 related logistical challenges they may be facing with respect to their meetings and there is no need for state legislators to rush to adopt a statutory amendment that could threaten stockholder rights.