Many thanks to James McRitchie, alway the most vigilant and valiant advocates for shareholder rights, for discovering this latest scheme to suppress shareholder votes:
Skadden scheme exposed by Phil Goldstein, of Bulldog Investors, threatens to kill shareholder rights. While we were fighting COVID-19 and new rules proposed by the SEC to eviscerate shareholder rights Skadden, Arps, Slate, Meagher & Flom LLP has been plotting to effectively do away with the right of shareholders to have their Rule 14a-8 proposals appear on proxies.
The Skadden scheme relies on the ability of corporate directors to adopt a bylaw or other measure to prohibit shareholders from voting on any proposal, other than those that statutorily require a shareholder vote. Additionally, the Skadden scheme locks out most potential board challenges, without adopting a poison pill, the Skadden scheme requires that, in a competitive election, candidates are required to obtain a supermajorithy of not just the votes but of the theoretically possible votes of all outstanding shares. In the likely event neither candidate receives the required supermajority vote, incumbents can easily be favored over challengers and reappointed.