McGuireWoods Trio Writes Article in The M&A Lawyer on Proxy Disclosures

June 21, 2024

McGuireWoods New York partners Jeffrey Chapman and Jeffrey Rothschild and associate Peter Morrison wrote an article in the June 2024 edition of Thomson Reuters’ The M&A Lawyer analyzing a significant new decision from the Delaware Supreme Court regarding proxy disclosures to stockholders.

In City of Sarasota Firefighters’ Pension Fund v. Inovalon Holdings Inc., the court ruled in favor of Inovalon’s minority shareholders, who sued after the company was sold to a private equity firm. The financial advisors who represented Inovalon on the deal did not fully disclose their relationships with the private equity firm, and Delaware’s high court ruled that the undisclosed potential conflicts of interest meant the minority stockholders’ votes to approve the deal were not fully informed.

“Proxy disclosures must provide accurate information as to the status of a financial advisor’s relationship with a counter party to a transaction as well as provide a way for stockholders to gauge the magnitude of the financial advisor’s past and concurrent relationships with counter parties, which may take the form of the total value of financial advisory work performed for counter parties,” the authors wrote.

The M&A Advisor article was based on a May 13, 2024, McGuireWoods legal alert written by the trio titled “Delaware Supreme Court Reverses Chancery on Adequacy of Proxy Disclosures to Stockholders.”