August 5, 2008

Exploring “Strategic Alternatives” and Postponing Annual Meetings

I recently was checking out Damien Park’s new blog – “Activist Hedge Fund Investing” – and noticed the spotlight on Point Blank Solutions and how Steel Partners is chasing after them. In particular what caught my eye was the see-saw legal battle over the company holding its annual shareholders’ meeting. The company hired a bank to explore strategic alternatives – probably because an activist is after them – and then used that to postpone the meeting and buy time. That is not anything new.

John Grossbauer of Potter Anderson notes: But what is pretty rare is a company coming back to the Delaware Court of Chancery for an extension of time after agreeing to a date to hold the annual meeting. I would imagine the Court would want some fairly compelling facts in order to permit the postponement, particularly where – as here – it would result in the meeting being held six months after the original Order was entered. Even the original postponement to August 19th is on the longer end of the range of time periods previously approved by the Court in similar cases.

How to Handle Hedge Fund Activism

We have posted the transcript from our recent popular webcast: “How to Handle Hedge Fund Activism.”