Case: Lovenheim v. Iroquois Brands, Ltd.
· Basically he wants a study done on force feeding in France of geese by a committee.
· Wants this request and the underlying information included in the proxy disclosure.
· He plans to introduce this shareholder proposal at the annual meeting under SEC Rule 14a-8.
· Iroquois refuses to do it also citing 14a-8([i})(5) saying it must be related to more then 5% of operations or earnings…and not otherwise significantly related to the issuers business.
· Iroquois points to this section and shows that this issue only represents 1% and they lost money on it last year.
· Guy then claims its “otherwise related” as its an ethical issue that could affect sales.
· HOLDING: Court says it’s a close call…looks to history…finds many instances of this type of info being included…and decides this guy should be allowed to include this information
· NOTE: Federal law allows the shareholder the right to propose to the board…but cannot command the board to do something…its only advisory. The distinction is the separation of power to the board of directors under state law. Essentially, even though this guy wins, his proposal is still only advisory.