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Advance Notice Bylaws After Kellner: Clarified Standards, Impact on Corporate Governance, Drafting and Enforcing

A live 90-minute CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, February 6, 2025 (Tomorrow)

1:00pm-2:30pm EST, 10:00am-11:30am PST

or call 1-800-926-7926

This CLE course will guide corporate counsel on the implications of the Delaware Supreme Court's recent and significant decision in Kellner v. AIM Immunotech Inc. regarding advance notice bylaws. The panel will discuss the standards clarified by the court, the impact on corporate governance, and best practices for drafting and enforcing advance notice bylaws to ensure compliance and avoid litigation.

Description

Advance notice bylaws require shareholders to provide prior notice of their intent to make a director nomination or other proposal within a set timeframe (typically 30-120 days) before a shareholder meeting. This allows the board and other shareholders enough time to gather information and make informed decisions on the proposed action.

Courts typically enforce advance notice bylaws that are reasonable, unambiguous, and do not interfere with the stockholder franchise. Consistent with that, the Delaware Supreme Court in Kellner v. AIM Immunotech Inc. struck down several advance notice bylaw provisions because they appeared intended to thwart a stockholder's proxy contest and impede its right to nominate directors.

The Kellner decision has significant implications for the drafting and enforcement of advance notice bylaws, which are crucial for ensuring a fair and orderly process for director nominations and shareholder proposals. Kellner helps to clarify the review standards for such bylaws, emphasizing the need for them to be reasonable, equitable, and not overly restrictive. Corporate counsel of Delaware corps. should understand Kellner’s implications in order to effectively revise or draft advance notice bylaws that will withstand judicial scrutiny.

Listen as our panel of experts discusses the key aspects of the ruling, including the standards for facial validity and equitable application. The panel will also provide practical guidance on how to navigate these complex issues when drafting advance notice bylaws.

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Outline

  1. Overview of the Kellner decision
  2. Standards for drafting advance notice bylaws
  3. Enforcement and challenges
  4. Practical guidance for corporate counsel

Benefits

The panel will review these and other critical issues:

  • Understanding Kellner’s implications
  • Identifying and addressing potential challenges to current advance notice bylaws
  • Drafting or revising advance notice bylaws that can withstand scrutiny
  • Language and/or circumstances most likely to invite scrutiny of advance notice bylaws or a successful challenge
  • Communicating bylaw requirements effectively to shareholders.

Faculty

Cannizzaro, Vincent
Vincent J. Cannizzaro, III

Partner
Morris James

Mr. Cannizzaro, III, chairs the firm's Corporate/Mergers & Acquisitions practice. He is a seasoned corporate...  |  Read More

Levi, Scott
Scott Levi

Partner, Public Company Advisory and Capital Markets Groups
White & Case

Mr. Levi’s practice focuses on ongoing compliance obligations under U.S. securities laws and corporate governance...  |  Read More

Nwaeze, Oderah
Oderah C. Nwaeze

Partner
Faegre Drinker Biddle & Reath

Mr. Nwaeze is a first-chair trial attorney who helps clients resolve complex corporate and commercial disputes. His...  |  Read More

Attend on February 6

Cannot Attend February 6?

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

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