Alerts

New York Court Grants Preliminary Injunction in Favor of Activist Investor Seeking to Nominate Slate of Directors

April 28, 2006

On April 24, 2006, the Commercial Division of the Supreme Court of the State of New York, Westchester County, granted a preliminary injunction barring defendant Warwick Valley Telephone Company ("Warwick") from using an advance notice by-law to prevent plaintiffs Santa Monica Partners, LLP, SMP Asset Management LLC, and Lawrence J. Goldstein from running an opposing slate of directors at Warwick's annual meeting of shareholders, scheduled for April 28, 2006. While not invalidating the advance notice by-law, the Court agreed with plaintiffs that it would be an "unreasonable application" of the by-law to use it to prevent the nomination of opposition candidates to fill board seats that were vacated shortly before the annual meeting and after the advance notice deadline had elapsed.