United States: Shareholders

Under SEC-Chairman Paul Atkins, the Securities and Exchange Commission has proposed a new set of rules that would permit electronic delivery as the default method of delivery for all required disclosures under the federal securities laws. [1] If adopted, this would mark a foundational and very welcome shift in how registered investment advisers, investment companies, business development companies, broker-dealers, transfer agents, and other regulated entities may deliver required disclosures to investors, clients, and other market participants.

A Delaware Superior Court decision confirms that appointed shareholder representatives have standing to pursue post-closing merger disputes on behalf of selling stockholders, while clarifying when implied covenant claims will be dismissed as duplicative of express contractual obligations. The ruling addresses two recurring issues in M&A litigation: the authority of shareholder representatives and the proper scope of gap-filling doctrines in contract interpretation.

Green Street Advisors has revised its governance scoring methodology to penalize public REITs that use OP unit-based compensation, arguing it creates potential misalignment between management and shareholders.