M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Tuesday, November 23, 2010

Airgas bylaw reversed by Supreme Court

See that there?  That's egg on my face (ARG-DelSupCtOpinion).  It's a total victory for Ted Mirvis and Wachtell.  The Supreme Court even cited approvingly to the ABA's form book.  

The Supreme Court overturned the Chancery Court, basically holding that since everyone has always assumed the language "in the third year following the year of their election" means a "three year term" for directors, then four months between annual meetings is too truncated to count as an annual meeting.  So a  bylaw that moves the annual meeting to a date that isn't near the "traditional" date, but still "in the third year following the year of their election" is invalid.  That seems like a victory for poor (or sloppy) drafting: "in the third year following the year of their election" or "three year term" ... whatev's.  

Of course, the court leaves unanswered the next question - okay, so what's the minimum amount of time between annual meetings?  Five months?  Six months?  More?  

So the good news?  By ruling against the bylaw, the Supreme Court has given new life to Air Products challenge to Airgas' "just-say-no" defense.   Could it be that we might finally get "just-say-no" litigated?  We'll see.  Air Products' challenge to Airgas' poison pill is next up in the docket.

-bjmq

 

http://lawprofessors.typepad.com/mergers/2010/11/airgas-bylaw-reversed-by-supreme-court.html

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