Chancery Court of Delaware Grants Declaratory Relief to FSM Clients, Overturning Shareholder Election
06/01/2022The Delaware Court of Chancery, by and through Chancellor Kathaleen St. Jude McCormick, overturned the shareholder election results in client’s favor after three client nominees had the winning votes impermissibly stripped away after a shareholder election at a bank holding company organized in Delaware. The Del. Gen. Corp. L. § 225 action sought to overturn the election after incumbent directors, e.g., directors competing for director slate with FSM clients, were deemed “elected” to the holding company board of directors after the company mis-applied its own Certificate of Incorporation. The Court, in its 69-page post-trial memorandum, concluded that the client-directors had been improperly excluded from the board and that the nominees were properly elected under the election by-laws and Certificate of Incorporation of the holding company. Pending post-trial order entry, these three nominees will now be seated as directors on the board of directors. The case was handled by Franke, Schultz, and Mullen partners John L. Mullen and Keaton G. Knott along with exceptional local counsel in Delaware, Kevin H. Davenport and John G. Day of Prickett, Jones, and Elliot, P.A. The opinion is available here: https://courts.delaware.gov/Opinions/Download.aspx?id=333560.