Richards Layton & Finger

Delaware Court of Chancery Addresses Director Questionnaire Requirements in Advance Notice Bylaws

September 2019

In Saba Capital Master Fund, Ltd. v. Blackrock Credit Allocation Income Trust, the Delaware Court of Chancery held that the failure by a shareholder seeking to nominate a competing slate of directors in a proxy contest to timely complete and return director questionnaires pursuant to the board’s request for additional information regarding the nominees under the company’s advance notice bylaw could not serve as a basis for invalidating the nominations under circumstances where the questionnaire was found to be overbroad and to have exceeded the scope of the bylaw’s information requirements. Despite its key finding, however, the Saba opinion suggests that director questionnaire requirements in advance notice bylaws are not facially invalid and, depending on their terms and the circumstances in which they are adopted