Plaintiffs Firms Show Support for SEC Shareholder Rights Proposal

Plaintiffs Firms Show Support for SEC Shareholder Rights Proposal - 8-27-2009

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Plaintiffs Firms Show Support for SEC Shareholder Rights Proposal
Nate Raymond

New York Law Journal. August 27, 2009
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EXCERPT: A rare joint letter to the U.S. Securities and Exchange Commission from a group of defense law firms over shareholder proxy access is receiving an even rarer response from nine of the country's largest plaintiffs law firms. The firms, more typically seen in shareholder litigation than in regulatory squabbles, include Labaton Sucharow; Bernstein Litowitz Berger & Grossman; and Cohen Milstein Sellers & Toll. The letter, dated Tuesday, supports the SEC's proposal to allow shareholders to nominate directors, exactly what the defense firms argued against last week. The defense firms that sent the joint letter were Wachtell, Lipton, Rosen & Katz; Simpson Thacher & Bartlett; Cravath, Swaine & Moore; Sullivan & Cromwell; Davis Polk & Wardwell; Latham & Watkins and Skadden, Arps, Slate, Meagher & Flom. "These are the same firms that brought us the poison pill," said Lawrence A. Sucharow, a name partner at New York's Labaton Sucharow, which took the lead on the letter. "Not exactly exemplars of shareholder rights." At the center of the dispute is a proposal before the SEC that would allow shareholders to nominate and elect individual directors to corporate boards. If approved in its current form, public companies would be required to include in their proxy materials shareholder nominees for directors that could comprise up to a quarter of the board. Shareholders also could put forward proposals for broader access to the ballot than the commission's regulations would require. In an Aug. 17 letter, the seven corporate law firms urged the SEC not to adopt the proposal and, if it did, to be "to be cautious in implementing what all participants in this debate acknowledge will be one of the most significant rule changes in SEC history." The defense firms said they did not support requiring companies to allow shareholder nominations.

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