Strategies for protecting companies in proxy contests

A recent trio of hotly contested proxy fights involving Norton Rose Fulbright’s Special Situations Team helped further clarify and define the rights of a board of directors to determine the timing of a shareholders’ meeting.

Bioniche Life Sciences Inc.

With the July 18, 2013, decision of Justice Brown of the Ontario Superior Court in Wells v Bioniche Life Sciences Inc.,¹ Norton Rose Fulbright obtained an important victory for its client Bioniche Life Sciences Inc. Justice Brown’s decision affirms and clarifies that a reasonable exercise of business judgment by the board of directors in setting the timing for shareholders’ meetings should not be interfered with by dissident shareholders or the court.

Intrinsyc Software International, Inc.

Justice Brown’s ruling in the Bioniche case builds on the decision of Justice Mesbur of the Ontario Superior Court in Marks v Intrinsyc Software International, Inc.,² a case in which Norton Rose Fulbright successfully represented the special committee of the board of directors of Intrinsyc Software International, Inc.

On December 10, 2012, Mr. Marks requisitioned a special shareholders’ meeting at which he sought to replace Intrinsyc’s board of directors. Intrinsyc’s board, on the considered recommendation of a special committee that was struck to address the requisition, responded to the requisition on December 20, 2012, by calling a combined annual and special shareholders’ meeting for May 14, 2013—155 days after Mr. Marks made his requisition and 146 days after the company gave notice of the meeting.

Agrium Inc.

The board’s judgment in choosing a date for the shareholders’ meeting played a key role in Agrium Inc.’s successful defence against activist shareholder JANA Partners LLC. In this case Norton Rose Fulbright was counsel to the special committee of the board of directors. In the circumstances of an aggressive attack from JANA Partners, which was causing ongoing disruption to Agrium’s business, the board called an early shareholders’ meeting. Accordingly, on February 15, 2013, Agrium gave notice that its annual shareholders’ meeting, at which shareholders would have the option of re-electing Agrium’s incumbent board or electing a board proposed by JANA Partners, would occur on April 9, 2013.

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