Non-Delaware Decisions on Director Nominations

Two courts recently issued significant corporate law decisions that are meaningful for corporations outside of Delaware, whose courts handle more corporate law disputes than other states because Delaware is the corporate domicile for many corporations. The first decision, In re Xerox Corporation Consolidated Shareholder Litigation, was issued by the Supreme Court of the State of New York [1] and involved a two-part injunction by the court. In particular, the court enjoined Xerox from: (i) proceeding with a business combination with Fujifilm; and (ii) enforcing its advance notice bylaw, with the result that a large stockholder who initiated a proxy contest after the corporation’s advance notice deadline could proceed with making director nominations. The second decision, Blue Lion Opportunity Master Fund, L.P. v. HomeStreet, Inc., [2] was issued by the Superior Court of the State of Washington for King County. That decision upheld a board’s decision to reject a stockholder’s nomination of a competing slate of directors on the basis that the nomination failed to comply with the company’s advance notice bylaw.

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