Nomination Bylaws Must Be Legal and Fair, Delaware Court Says

Delaware’s top court delivered a first-of-its-kind court ruling Thursday offering clarity on the wave of advance-notice nomination bylaws that have emerged as a flashpoint in the escalating legal showdown between corporate boards and activist investors.

The state’s justices handed a loss to AIM ImmunoTech Inc., saying the biotech company wielded its bylaws unfairly against Ted Kellner, a stockholder seeking board seats, even if he may have concealed the unsavory past of two associates. Though some of the bylaw provisions were “valid,” they had no purpose other than to protect AIM’s sitting directors from legitimate dissent, the unanimous state supreme court ...