Court Dismisses Another Say-On-Pay Disclosure Case

The District Court for the Northeastern District of Illinois recently granted a Rule 12(b)(6) motion to dismiss an action styled Noble v. AAR Corp.  The plaintiff alleged that the company failed to provide adequate disclosures as to what exactly the Board considered in relation to the say-on-pay proposal.

The court granted the defendants’ motion to dismiss because the Dodd-Frank Act provides that the only relevant disclosures are those set forth in Item 402 of Regulation S-K.  The court noted that plaintiff’s attempts to create additional disclosure obligations for say-on-pay votes were without merit.

Information on another case, the Symantec say-on-pay dismissal can be found here.

Our thanks to The Conference Board blog for pointing this case out.  The blog also has a handy scorecard for the results of similar litigation to date:

  • Faruqi (the law firm brining these actions) plaintiffs succeeded in obtaining a preliminary injunction and substantial legal fees settlement in one case;
  • Scored several quick legal fees settlements without having to litigate their preliminary injunction claims;
  • Lost motions to obtain preliminary injunctions in several cases where companies refused to settle;
  • In the only two decisions on the merits, plaintiffs have seen their lawsuits dismissed for failing to state causes of action in Symantec and AAR Corp.

Check frequently for updated information on the JOBS Act, the Dodd-Frank Act and other important securities law matters.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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