Delaware Supreme Court Requires Strict Compliance with Deadlines in Advance Notice Bylaw
February 2020
Publication
In Saba Capital Master Fund, Ltd. v. Blackrock Credit Allocation Income Trust, the Delaware Supreme Court, reversing the earlier decision of the Court of Chancery, held that two closed-end funds properly excluded the shareholder-plaintiff’s dissident nominees at their annual meetings on the basis that the nominating shareholder failed to comply with the deadlines in the funds’ advance notice bylaws. The opinion signals that the Delaware courts, in recognition of the important function of advance notice bylaws in promoting orderly annual meetings and informed decision-making in director elections, will enforce clear and unambiguous advance notice bylaws. The opinion also provides corporations substantial guidance in preparing for proxy contests and in taking appropriate measures to review and assess materials furnished pursuant to their advance notice bylaws and to enforce the terms of those bylaws.