Cravath Client Memo Featured in The New York Times

On September 9, 2008, a client memo by Cravath partners Philip A. Gelston and James C. Woolery, entitled “Beneficial Ownership—By-law Disclosure Proposal,” was featured in an article in the Dealbook section of The New York Times. The Dealbook article, entitled “Shedding Light on Hidden Activists,” remarked that Cravath’s proposal of a new approach to shareholder activism defense was “elegant and simple, relying on no complicated legal mechanisms to flush these unseen activists out from the brush.” Corporate Board Member magazine has also featured this memo on their website in the “Editor’s Picks” column.

Cravath’s memo recommended that corporations consider amending their advance-notice by-laws governing shareholder proposals to capture the use of swaps by activists. The proposed new by-laws would expand the definition of the term “beneficial ownership” by expressly capturing derivatives and would require investors to disclose whenever they accumulate more than a certain economic exposure at or above either a 7.5 percent or a 10 percent threshold.

Please click here to read the client memo.