It’s quite rare for shareholder proponents to resort to the courts when the Corp Fin Staff concurs with a company that it can exclude a proposal under the Rule 14a-8 no-action letter process. But that’s what happened late last week when the National Center for Public Policy Research (known as the “NCPPR”) and two individuals filed a petition for review with the Fifth Circuit to review Corp Fin’s no-action response to a company.

The proposal at issue is one that NCPPR has made at several other companies in recent years, and in many cases the subject company has received concurrence from the Corp Fin Staff that the proposal could be excluded on an “ordinary business” basis. Included in Corp Fin’s no-action response is a letter from NCPPR to the Corp Fin Staff, which makes clear that its plan from the outset was to seek reconsideration if the Staff agreed with the company’s request. The letter lays out NCPPR’s concerns with Corp Fin’s no-action letter process, in addition to its arguments for why its proposal should not be excluded.

We will see how this plays out fairly quickly, as NCPPR has requested a ruling from the court by May 7th.

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Photo of Allison Handy Allison Handy

Allison Handy is the firmwide co-chair of the Corporate & Securities practice. Her extensive experience includes advising public and private companies in connection with corporate governance practices, disclosure issues, and capital markets transactions, such as equity offerings, debt offerings and tender offers. She…

Allison Handy is the firmwide co-chair of the Corporate & Securities practice. Her extensive experience includes advising public and private companies in connection with corporate governance practices, disclosure issues, and capital markets transactions, such as equity offerings, debt offerings and tender offers. She is also a leader of the firm’s Environmental, Social, and Governance advisory team.

Allison provides counsel to companies on a broad range of issues faced by management and directors in connection with the many compliance aspects of securities laws, including governance rules adopted by the Securities and Exchange Commission (SEC) and stock exchanges. She advises boards and committees in matters related to internal investigations and the efforts of shareholder activists, and works closely with in-house counsel, financial personnel, and outside auditors and advisors to help her clients prepare proxy statements and other reports to investors that meet complex disclosure obligations.

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