Courtesy of Wilmington lawyer Brian Rostocki, comes a report of the first example of the SEC availing itself of a procedure authorized last year that allows the SEC to ask the Delaware Supreme Court for rulings on particular issues of Delaware law that impact the SEC. Here is a post on this blog describing the new procedure when it was authorized last year. Here is an article from Securities Law360 describing the SEC’s request in more detail.
The issue that the SEC has asked for the Delaware Supreme Court to rule on is whether companies must reimburse shareholders for the costs of an only partially successful short-slate proxy contest. AFSCME asked the SEC for its position on the reimbursement for costs that it will incur in a proxy contest for a minority of the CA, Inc. board at a shareholders’ meeting scheduled for September. In turn, the SEC asked the Delaware Supreme Court for a definitive ruling on this issue of Delaware law.
The Delaware Supreme Court may hear oral arguments on the issue next week.
The CorporateCounsel.net Blog here provides an insightful review of the matter.