HK just posted links to three recent court docs.
The first document is a motion to dismiss.
Looks like the other two are supporting docs. One is a memorandum of law containing supporting materials to justify the dismissal. The other is a request that the court reviews much the material we’ve linked to in the past.
The memorandum of law is a fun read. Some highlights:
Plaintiffs’ contrived claims are nothing but a stalling tactic. Despite their claims of
irreparable harm arising out of alleged misstatements dating back to March 25, 2019, and demands for injunctive relief, Plaintiffs did not file suit until May 21, on the eve of the scheduled shareholder vote, and, to this day, have not moved for injunctive relief. Having lost the debate before TPL’s shareholders, Plaintiffs should not be permitted to frustrate the exercise of those shareholders’ rights through meritless and harassing litigation.
It’s rich that the questionnaire came from Kelley Drye.
On March 25, 2019, TPL announced that it was postponing the special shareholder
meeting, which had not yet been formally called and noticed, from May 8 to May 22. Although Incumbents had expressly declined to consider Mr. Oliver’s nomination just three weeks earlier, TPL’s March 25 press release claimed the postponement was needed to “provide the Trustees with sufficient time to consider [Mr. Oliver’s] nomination.”
Just three days later on March 28, TPL filed a preliminary proxy statement stating that“[t]he Trustees do not endorse Mr. Oliver” and “strongly recommend” that shareholders elect Mr. Young. Ex. 3. Earlier that same day, Kelley Drye—the law firm that promotes Mr. Barry as “a partner in the firm’s New York office,” sent Mr. Oliver for the first time a 66-page “Trustee Questionnaire.” Despite having already summarily rejected Mr. Oliver, Plaintiffs claim that the questionnaire was sent to Mr. Oliver in order to discharge their “duties pursuant to the Trust’s governing documents, to ensure that trustees are not disqualified, both with respect to capabilities and personal character and integrity.” The questionnaire, however, stated that its “purpose” was to collect information for TPL to use in its proxy statement—i.e., in its campaign against Mr. Oliver. Plaintiffs also claim that the questionnaire was needed “to secure a fully informed shareholder vote,” but have never publicly disclosed even their own candidate’s questionnaire, if it exists.
Did I say Trustee? I meant concerned holder of 300 shares.
There is no express private right of action under Section 14(a) of the Exchange Act.
Rather than “open a Pandora’s box by extending” the judicially created private right of action under Section 14(a) to “any person potentially injured by a proxy statement,” the Fifth Circuit has made clear that only stockholders “with voting rights” have standing to pursue a Section 14(a) claim. 7547 Corp. v. Parker & Parsley Dev. Partners, L.P., 38 F.3d 211, 229–30 (5th Cir. 1994) (citing Virginia Bankshares, Inc., v. Sandberg, 501 U.S. 1083, 1106–08 (1991)).
Plaintiff TPL is an issuer, not a shareholder with voting rights. In dismissing a Section
14(a) claim at the pleading stage, Judge Godbey explained that a “corporation with no voting rights in its own stock . . . lacks standing to bring a claim under section 14(a)” because Section 14(a) “protect[s] only interest-holders with voting rights.” Ashford, 2017 WL 2955366, at *9. The Amended Complaint does not allege that Messrs. Barry or Norris are TPL shareholders, but expressly states that each “brings this suit solely in his capacity as a Trustee.” ¶¶ 11–12 (emphasis added). Plaintiffs do not, and cannot, allege that, Messrs. Barry or Norris had any voting rights in their capacities as trustees. See 7547 Corp., 38 F.3d at 229–30 (unit holders who were not entitled to vote at meeting did not have standing under Section 14(a)). Because “voting rights are critical to standing under section 14(a),” id., none of the three Plaintiffs in this action have standing to bring a Section 14(a) claim.