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Court Of Chancery Interprets Preferred Stock Rights

Cedarview Opportunities Master Fund L.P. v. Spanish Broadcasting System Inc. C.A. 2017-0785-AGB (August 27, 2018)

How to interpret the provisions of preferred stock is often a difficult task. Any preference must be spelled out and any doubts resolved against preferring one class of stock over common stock. This decision holds that the preferred stock must show evidence it was intended to a preference at least when the authorization for that stock is ambiguous. The decision also affirms that stockholder rights to inspect records cannot be taken away by a certificate of incorporation.

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