Lawsuits to Postpone Annual Meetings Claim to Seek Additional Disclosure

A potential new trend in securities litigation has plaintiffs seeking class action status and “appropriate damages” and asking the court to prevent the shareholder vote, particularly on Say-on-Pay or Share Plan requests, due to alleged misleading and incomplete proxy disclosures.   The most visible of these lawsuits was filed against Microsoft related to its November, 2012 annual meeting proxy.  A copy of the complaint is attached.  PDF, 18 pages.  “The rationale for the nascent claims in these lawsuits is troubling,” say lawyers for DLA Piper in a recent article on the topic. Regardless of the amount and detail of pay information a company may disclose in its proxy statement, a plaintiff may assert that even more disclosure is required.   Excessive candor, itself, may prove risky.

 

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