There isn’t much clarity in Delaware law about whether activist hedge funds should get access to corporate books and records when seeking to bolster their dissident director election contests.
That’s the view of Widener University professor emeritus Lawrence Hamermesh, who spoke with The Deal for its Activist Investing Today podcast about what the Delaware Supreme Court might be thinking about as it considers billionaire insurgent Carl Icahn’s request for private communications at target Occidental Petroleum Corp. (OXY).
“I can’t remember a case that squarely raised the issue of, ‘How about being allowed to dig into a transaction where there is a legitimate difference in views as a business matter but not a claim of wrongdoing?'” Hamermesh said. “Is that fair game, to dig into [books and records] in aid of a proxy contest? It isn’t very clear.”
In addition to books and records litigation, Hamermesh explained why he thinks two recent Delaware court decisions are a big positive for corporate advanced-notice bylaws as well as why he believes sunset provisions for insider-controlled share voting structures come with their own problems.