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Court dismisses petition for a court-ordered shareholders meeting with independent chair in lieu of a meeting requisitioned by shareholders

In a dispute between three petitioning directors (the Petitioners) and three requisitioning shareholders (two of whom were also directors) (the Requisitioning Shareholders) of Photon Control Inc. (Photon) (TSX-V: PHO), the Petitioners asked the British Columbia Supreme Court (the Court) to exercise its powers under the Business Corporations Act (British Columbia) (the Act) to intervene in … Continue reading

Should companies expect an increase in short-selling activism in Canada?

Success breeds imitation. The persistence of that cliché is good evidence of its accuracy.  Its implications, however, may be a warning call with respect to shareholder activism in Canada. The woes of Valeant Pharmaceuticals International Inc. (“Valeant”) and its share price have been well documented in the media. Following a report by Citron Research, who … Continue reading

“Dead hand proxy puts” under scrutiny in Delaware

A decision of the Delaware Chancery Court last fall has set off a wave of books and records inspection demands by stockholders, as well as threatened litigation, for Delaware corporations that have entered into credit agreements containing “dead hand proxy put” provisions.  A “dead hand proxy put” allows the lender to demand immediate repayment of … Continue reading

Moving away from a mechanistic evaluation of board term limits

Earlier this month, Robert Pozen, senior lecturer at Harvard Business School contended that a simple reliance on board term limits as an evaluation tool of corporate performance is based on “faulty logic”.[1] Concerns around extended tenure of directors typically include anxieties over compromised director independence and the development of a friendliness with management. According to … Continue reading

2015 Trends and Insights: Activism in Canada

In the latest issue of Ethical Boardroom, Walied Soliman and Orestes Pasparakis, co-chairs of Norton Rose Fulbright’s Special Situations Team, discuss activism in the Canadian corporate landscape and expectations for the 2015 proxy season in their article, “2015 Trends and Insights: Activism in Canada“. Click here to access the article (at pages 96-97). Stay connected with Special Situations … Continue reading

Webinar: Shareholder activism – a year in review

On February 4, 2015, Walied Soliman and Orestes Pasparakis, co-chairs of Norton Rose Fulbright’s Special Situations Team, were joined by Wes Hall, CEO, Kingsdale Shareholder Services Inc. to host our annual video webinar “Shareholder Activism: A Year in Review – Cutting-edge Tactics in 2014 and a Look Ahead”.  In 60 minutes, our speakers update you … Continue reading

A Changing Climate for Proxy Advisory Firms: Developments in the US and Canada

The role of proxy advisory firms in the marketplace has been a focal point on both sides of the border as recent guidance by the US Securities and Exchange Commission (SEC) and the Canadian Securities Administrators (CSA) highlights the powerful influence of proxy advisory firms and need for increased accountability and transparency. In the US, … Continue reading

The Rise of Policy Activists?

In a recent twist on activist investing, People for the Ethical Treatment of Animals (PETA) purchased shares in SeaWorld in an effort to address conduct it considers animal cruelty.  According to PETA, it bought “the smallest number of shares necessary” to give it “the right to attend and speak at annual meetings and to submit … Continue reading

Can Activist Shareholders Spur Innovation in the Technology Sector?

Activist shareholders have been accused of hindering innovation in companies they target. During a 2-3 year activist engagement in a company, activist shareholders focused on pursuing short-term goals may seek to cut costs in the target, maximize profits, then exit quickly, (possibly) with little care for the long-term prospects of the target company. In Hedge … Continue reading

Why Are Activist Investors Drawn to Canada?

Over the past decade, proxy contests have gone from a once rare phenomenon to a standard feature of the Canadian corporate world and as the number of contests have increased, so too have activists’ success rates. To some extent these trends have been driven by greater acceptance of activists’ efforts in the wider investment (and … Continue reading

Is Shareholder Activism Hurting Bondholders?

A recently released research report by Moody’s Investors Service examines the credit impacts of activist shareholder activity, arguing that shareholder initiatives do not always benefit bondholders. In fact, the report suggests that the means by which shareholders drive change in capitalization and strategy, including through share repurchases, increased dividends and divestitures of cash-generating assets, often … Continue reading
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