Chancery Addresses Requirements for Written Consent of Stockholder in Lieu of Meeting
The Ravenswood Investment Company, L.P. v. Winmill, C.A. No. 3730-VCN (Del. Ch. Nov. 27, 2013).
Issue Addressed: The statutory requirements under DGCL Section 228 for a written consent of stockholder in lieu of meeting, and a written consent of director in lieu of meeting pursuant to DGCL Section 141.
The procedural and factual background of this case was highlighted on these pages in connection with prior decisions in this matter.
DGCL Section 228(c) provides that every written consent shall bear the date of the signature. The issue in this case was that the date was preprinted and was preceded by the words “as of.” There was no factual dispute however, that the signature was provided on that same date. The Court distinguished the Wexford case which involved signatures of shareholders which bore the same date but which in realty were not all signed on the same date.
In essence, the Court reasoned that because there was no factual question that the signature of the stockholder was made on the date typed on the form, it complied with the requirement of Section 228. By contrast, the Court noted, that the written consent of a director in lieu of a meeting is not required to be dated pursuant to DGCL Section 141(f).
PRACTICE POINTER: The Court provides advice to practitioners that the better practice would be to place a separate date next to each shareholder signatory on a written consent pursuant to Section 228(c) which would thereby avoid issues that arose in this case. But where, as here, there is no uncertainty as to the date that the signature was made and that is the same date stated on the written consent, the statute is satisfied.
The Court also addressed a separate and unrelated issue about whether discovery of documents should be produced in original “native format.” The Court relied on prior case law to explain that unless there is a “particularized showing of need,” there is no general requirement that documents be produced in their “native file format including metadata.” See footnote 16 and accompanying text.