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Court of Chancery Upholds Advance Notice Bylaw

Posted In Directors

Openwave Systems Inc. v. Harbinger Capital  Partners Master Fund I, Ltd., C.A. No. 2690-VCL (May 18, 2007).

Corporate bylaws sometimes require that the company be given advance notice of the intent to nominate anyone for election to the board. When those provisions are not clear, they will be interpreted in the way that expands stockholder rights. However, when the provisions are clear enough to give notice of their minimum requirements, then they will be enforced. That is what occurred here where the winning candidate was disqualified for his failure to comply with a reasonably clear advanced-notice bylaw.

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