Charged with looking out for the health of a business, shareholders play an important role in the life of many businesses. When a disagreement arises between shareholders, there are often no easy answers and resolving the matter can be difficult. Recently the drugmaker Vivus reached a settlement with First Manhattan Co., the largest shareholder it has. First Manhattan Co. was seeking greater control of the maker of the obesity drug.
The shareholder dispute came to a head earlier this month when First Manhattan, owner of 9.9 percent of the business' outstanding stock, filed a lawsuit seeking to prevent the drugmaker from soliciting votes or proxies for the upcoming shareholder meeting. The shareholder also took issue with the way results from a director election were handled and sought to have a stop put to any further actions being taken on behalf of the company.
The settlement will result in multiple changes including a larger board and the resignation of several of the previous directors. First Manhattan will see its six nominees as new members and a new CEO, who is supported by the shareholder, is expected to take over soon.
Shareholder disagreements are legally complex wars to wage with many possible outcomes. Because of this it is not uncommon for lawyers to be involved in the resolution of the matter. Due to the nature of these types of cases most find it necessary to have attorneys who have handled such cases in the past, on their side. Ensuring this is the case could be the difference between success and failure.
Source: Salon, "Drugmaker Vivus settles with biggest shareholder," Associated Press, July 19, 2013