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July 6 — Construction management firm Hill International Inc. misinterpreted its own bylaws by contending that an activist investor's shareholder proposals and director nominations were untimely, according to a July 2 Delaware Supreme Court decision.
Affirming a Delaware Chancery Court ruling, a three judge panel held that an affiliate of activist Bulldog Investors LLC had complied with the plain language of Hill's advance notice bylaw.
In June, Vice Chancellor J. Travis Laster issued orders postponing Hill's June 9 annual meeting to permit the affiliate, Opportunity Partners LP, to present certain proposals and director nominations.
Bulldog Investors has been urging Hill to explore a sale, and Opportunity, which has accumulated more than 5 percent of the company's public stock, is seeking to replace two Hill board members at the annual meeting.
The dispute over the timeliness of Opportunity's proposals revolved around the company's notice of the anticipated annual meeting date and how that triggered its advance notice bylaw.
Hill's bylaw requires stockholders who wish to submit proposals at the annual meeting to give written notice within a 30-day window—between 60 and 90 days before the annual meeting.
However, if the company gives notice or public disclosure of the annual meeting fewer than 70 days before it occurs, then the stockholder notice must be given within 10 days of that notice.
Hill contended that the 30-day window was triggered by its 2014 proxy statement, which stated that it anticipated its 2015 annual meeting would fall “on or about June 10, 2015.”
However, the Delaware high court disagreed, holding instead that the 10-day notice period was triggered by the company's 2015 proxy statement, which announced the actual date of the annual meeting.
Writing for the court, Justice Karen Valihura concluded that the company's advance notice bylaw requires the company to provide notice of the “actual date” of it annual meeting to trigger the 30-day window.
“The plain meaning of ‘the date' means a specific day—not a range of possible days,” she wrote.
Finding that Opportunity had delivered its notice within the 10-day period prescribed, the court upheld the chancery court's grant of mandatory injunctive relief.
Hill International and the individual defendants were represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP and Duane Morris LLP.
Opportunity Partners was represented by Rosenthal, Monhait & Goddess, P.A. and Shahmoon & Ellisen LLP.
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The opinion is available at http://www.bloomberglaw.com/public/document/Hill_Intl_Inc_v_Opportunity_Partners_LP_No_305_2015_BL_212602_Del.
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