Insights From Two Recent Successful Proxy Contest Defenses


In most recent situations in which activist shareholders have sought board representation, the activist has achieved its objective – either by negotiation and settlement with the issuer or by taking the matter to a vote and winning the support of fellow shareholders.1 However, in two recent cases – Alere’s defense against Coppersmith Capital Management and Walter Energy’s defense against Audley Capital Advisors – the issuer prevailed. While we are loathe to draw sweeping conclusions from only two situations, and note that every situation is different, there are noteworthy observations to be made:

It helps to have fresh, independent, members of the board

- In Alere, all four of the board’s nominees were new independent persons (two affiliated with an existing shareholder) and the issuer agreed pre-annual meeting to expand the board post-annual meeting to include one additional new director affiliated with another shareholder. Nine of the eleven board members (including the issuer’s nominees) were independent.

- In Walter Energy, four of the board members were new in the last two years, and nine of the ten directors were independent.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

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.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.