Delaying Judgment
Volume 26 Number 3, March 2012 MERGERS AND AQUISITIONS Delaying Judgment Day: How an adjournment, the meeting is convened without taking a stockholder vote, but then reconvened to Defer Stockholder Votes in at a later time and date. However, a stockholder Contested M&A Transactions meeting also can be postponed or recessed. In a postponement, the previously scheduled stock- holder meeting is not convened, but is delayed to In connection with an M&A transaction, pub- a subsequent time and date. In a recess, the stock- lic companies sometimes fi nd it desirable to delay holder meeting is convened, and then “recessed” a previously scheduled stockholders meeting. without taking a stockholder vote and continued Adjournment is the most traditional method, but at a later time and date. a recess or postponement may be appropriate. In any event, a review of the company’s charter and The determination of whether a company can bylaws, applicable state or foreign law, the federal delay its previously scheduled stockholder vote, securities laws and the agreements governing the and the best method of doing so, requires a rigor- transaction must be analyzed. ous analysis of the company’s charter and bylaws, applicable state or foreign law, the federal securi- by Lois Herzeca and Eduardo Gallardo ties laws, and the agreements governing the trans- action. Public companies that are seeking stockholder approval of a contested business combination Reviewing Organizational Documents transaction have sometimes found it desirable to delay a previously scheduled meeting of stock- As an initial matter, both the charter and holders. The company may wish to provide stock- bylaws of the company should be reviewed to holders with additional time to consider new determine if, and to the extent that, they address information (such as a new or revised acquisition the ability of the board of directors, or the chair proposal), may need additional time to solicit of the meeting, to delay a stockholders meeting.
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