U.S. courts dismiss two suits against shareholder activist Chevedden
BOSTON, March 11
BOSTON, March 11 (Reuters) - Shareholder activist John Chevedden has won favorable rulings in separate federal suits brought by Omnicom Group Inc and EMC Corp, breaking a pattern of legal setbacks for the private investor.
Chevedden, who lives near Los Angeles, is well-known in corporate governance circles for the proposals he files at scores of companies each year calling for changes such as having an independent board chairman. Some companies have successfully sued to block his measures.
In January, advertising company Omnicom sued Chevedden in U.S. District Court in New York, seeking a declaration it could leave off its annual proxy statement to shareholders one of his proposals calling for shareholder voting tallies to be kept confidential. Omnicom argued such a change could break New York state law.
But in an order on Tuesday Judge Louis Stanton granted a motion by Chevedden to dismiss the suit. Stanton noted Chevedden promised not to sue if Omnicom excludes his proposal and added that "the possibility of SEC (Securities Exchange Commission) investigation or action is remote."
In a similar case in January, data-storage company EMC sued Chevedden and ally James McRitchie in U.S. District Court in Boston. EMC sought a declaration it could exclude from its proxy statement their proposal that the company's board chairman should be independent.
But in a March 7 hearing, Judge Mark Wolf dismissed the case, according to a transcript issued Tuesday. Like Judge Stanton, Wolf said there is little risk of an SEC enforcement action if EMC excluded the proposal.
A spokesman for Omnicom did not immediately return messages late Tuesday.
EMC spokesman Dave Farmer via email said Wolf's order "did not reach the issue of whether the proposal satisfies SEC rules. EMC is exploring all its options."
In an interview, Chevedden called the rulings "overwhelmingly positive." With the suits, Chevedden said, companies are dodging precedents giving shareholders their say.
The New York suit is Omnicom Group vs. Chevedden, U.S. District Court, Southern District of New York, No. 14-00386.
The Massachusetts suit is EMC Corp vs. Chevedden et al, U.S. District Court, District of Massachusetts, case No. 14-10233.