June 10, 2009

Proxy Access: Debating the Issues

When the SEC’s proposing release finally becomes available – it’s already been three weeks since the open Commission meeting and still no release! – the hunt will be “on” to start writing comment letters and meet the 60-day deadline since the SEC will need to act fairly shortly after the deadline if they truly want something effective before the beginning of the next proxy season. Here are some resources that already have identified issues that will undoubtedly be featured in numerous comment letters:

– JW Verret on the Conglomerate blog regarding bylaw complications and on the blog regarding Chinese Menu ballot concerns

– Floyd Norris’ blog on various issues

– Wachtell Lipton’s blog on balance of state and federal law

– Prof. Lucian Bebchuk’s blog on the need for comprehensive reform of corporate elections

– Steven Davidoff on the DealBook blog on whether boards should be managing or monitoring

As the flood of law firm memos arrive dissecting the proposing release, we will be posting them in our “Proxy Access” Practice Area.

Obama Requires Federal Agencies to Review Preemption Policies

In a bizarre coincidence, at the same time that the “state law vs. federal law” debate will rage in the proxy access context, President Obama has sent a memo to all federal agencies asking that they review all of their regulations aimed at preempting state laws issued during the past ten years in an effort to determine whether the preemption is justified – and ensure that statements of preemption be included in future rulemakings only when there is a sufficient legal basis.

A Member’s Thoughts: North Dakota Reincorporation

During the SEC’s open Commission meeting on proxy access, the North Dakota Publicly Traded Corporations Act was mentioned quite a bit. I have blogged before that the first company – American Railcar Industries – has proposed reincorporating from Delaware to North Dakota.

Recently, a member sent me this note: “Shareholders have submitted their own proposals at more than a dozen companies. It appears that in every case, the proponent has been an individual, mostly John Chevedden (Continental Airlines, Southwest Airlines, and Lowes). Many of these companies have not yet had their annual meetings. At those meetings already concluded, there has been only minimal support for these proposals. It will be interesting to the results at American Railcar’s meeting on June 10th where the proposal has the board of director’s approval.”

When Will the SEC’s Proxy Access Proposing Release Be Posted?

Who knows? A proposing release typically is posted anywhere between a few days and two weeks after the related open Commission meeting. Now that we are three weeks from the proxy access meeting, I believe we are approaching record “still waiting” territory. Give us your anonymous opinion as to when you think the release will become available:

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– Broc Romanek