UCLA Law Professor Stephen M. Bainbridge has published an analysis of a decision recently made by the Third Circuit Court of Delaware in the case of Trinity Wall Street v. Wal-Mart Stores, Inc.
His explanation of the Court’s decision, “Two Cheers for Trinity Wall Street v. Wal-Mart: The Awkward New Test for Ordinary Business Exclusion,”
appeared in the August 21, 2015 issue of Legal Backgrounder
, a publication of the Washington Legal Foundation, the nation’s premier public interest law and policy center.
WHO: Stephen M. Bainbridge is the William D. Warren Distinguished Professor of Law and a leading expert on corporate governance and public interest law. He is a prolific scholar whose work covers a variety of subjects, but places a strong emphasis on the law and economics of public corporations. He has written over 90 law review articles which have appeared in such leading journals as the Harvard Law Review, Virginia Law Review, Northwestern University Law Review, as well as many others. His blog, ProfessorBainbridge.com, was named by the ABA Journal as one of the Top 100 Law Blogs of 2007, 2008, 2010, 2011, and 2012.
BACKGROUND: The Third Circuit Court’s decision on Trinity Wall Street v. Wal-Mart Stores, Inc. addressed shareholders’ use of a provision of the federal proxy rules known as the shareholder proposal rule – i.e., Securities and Exchange Commission (SEC) Rule 14a-8 – to micromanage corporate decisions. The rule permits a qualifying shareholder of a public corporation registered with the SEC to force the company to include a resolution and supporting statement in the company’s proxy materials for its annual meeting. Trinity had submitted a proposal for inclusion in Wal-Mart’s 2014 proxy statement that was closely linked to Wal-Mart’s sale of rifles with high capacity magazines. The case tested whether the SEC’s Rule was to be rendered entirely ineffectual.
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