Kai Liekefett leads Sidley Austin’s Shareholder Activism Practice. He has 18 years of experience in corporate law in New York, Houston, London, Germany, Hong Kong and Tokyo.
In the last two years, Liekefett has been involved in more than 20 proxy contests, more than any other defense attorney in the country. Prior to joining Sidley, he was a partner at another global law firm, which he led to the top of the activism defense league tables of Thomson Reuters, FactSet SharkRepellent and Activist Insight in 2016 and 2017.
Christopher P. Skroupa: How would you characterize this year’s proxy season over last year?
Kai Liekefett: This proxy season has been very different than last year’s. There are few high profile contests against large and mega caps. We are seeing this proxy season, however, a significant number of “withhold-the-vote” campaigns, where dissidents are running a contest against the target board without an opposing slate of director candidates. Historically, these kinds of campaigns have been rare.
Skroupa: Are you seeing a different trend in settlements versus shareholder votes?
Liekefett: Last year was remarkable because it saw a 50 percent drop in settlements compared to the 2016. This year, the pendulum appears to be swinging back. My impression is that fewer activist situations will go the distance to the annual meeting this year.
Skroupa: What is interesting about the HomeStreet Bank fight and what should the reader take away from it?
Liekefett: In the HomeStreet proxy fight, the dissident submitted a timely nomination notice but failed to comply with the disclosure requirements under the advance notice bylaw of the company. The dissident sued when the company rejected the nomination notice as deficient. However, the court ruled in favor of the company, and made it clear that a board has the authority to enforce advance notice bylaws. This was the first time a court applying Delaware law invalidated a timely submitted nomination notice for failure to comply with disclosure requirements.
While it was a Washington court, both parties agreed that the court should look to Delaware case law since there was no Washington precedent on point.
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