## Facts

- Prime Computer, Inc. launched a hostile tender offer for any or all outstanding shares of Computervision Corporation.
- Prime stated in its offer materials that it intended to solicit stockholder written consents under 8 Del. C. § 228 to take action that would speed its takeover efforts and avoid a Computervision defensive measure.
- In response to the takeover effort and planned consent solicitation, Computervision’s board adopted “Consent Solicitation Bylaws,” adding Sections 12 and 13 to the bylaws.
- Section 12 imposed an absolute minimum 20‑day waiting period, measured from the start of a consent solicitation, before any stockholder action by written consent could become effective (subject to a limited exception not at issue).
- Section 13 required an outside inspector to review consent forms and issue preliminary findings, but the inspector could not report earlier than 20 days after the start of the solicitation.
- Section 13 also contemplated challenges to the inspector’s preliminary findings, which could further postpone the effectiveness of any consent action.
- Computervision’s certificate of incorporation did not require these 20‑day delays.
- Prime (and its acquisition vehicle) filed suit in the Delaware Court of Chancery to stop enforcement of the new bylaws as inconsistent with § 228 and Delaware precedent, including *Datapoint Corp. v. Plaza Securities Co.*
- The Court of Chancery preliminarily enjoined enforcement of Sections 12 and 13. Computervision and its directors pursued an expedited interlocutory appeal to the Delaware Supreme Court.

## Issues

1. Whether bylaws may impose a fixed, minimum 20‑day delay on the effectiveness of stockholder action taken by written consent under 8 Del. C. § 228.
2. Whether bylaws that mandate an inspector review process—structured to require at least 20 days before findings and allowing additional delay through challenges—are valid as “ministerial” procedures under § 228 and *Datapoint*.

## Decision

- The Delaware Supreme Court affirmed the Court of Chancery’s preliminary injunction.
- The court held that neither 8 Del. C. § 228 nor *Datapoint* permits bylaws that delay the effectiveness of stockholder action by written consent for an automatic minimum period.
- The court recognized that § 228 requires consents signed by holders of the required vote (typically a majority of outstanding voting shares) and that consents not coupled with an interest may be revoked.
- The court accepted that a corporation may use an inspector to perform verification and tabulation functions, but it rejected procedures that transform verification into a timing barrier that postpones when a valid majority’s action becomes effective.
- Because Sections 12 and 13 built in at least a 20‑day waiting period (with the possibility of more delay through challenges), the court agreed they conflicted with the statutory scheme for action by written consent and could not be enforced.

## Legal Principles

- Corporate bylaws are invalid to the extent they conflict with the Delaware General Corporation Law, including 8 Del. C. § 228.
- Section 228 authorizes stockholders to act without a meeting by delivering written consents representing the vote required to take the action; bylaws may not add a fixed waiting period that postpones effectiveness after the required consents exist.
- Written consents that are not coupled with an interest may be revoked, and validity disputes may require review; however, procedures for reviewing consents must remain administrative (verification and counting) rather than a device for delaying stockholder action.
- *Datapoint* supports the use of an inspector to determine the validity of consents and revocations, but it does not approve bylaws that impose an across-the-board time delay as a condition to effectiveness.
- Interference with the stockholder vote can constitute irreparable harm supporting preliminary injunctive relief in a control contest, particularly where a bylaw alters the statutory operation of written-consent action.

## Conclusion

The Delaware Supreme Court held that Computervision’s consent-solicitation bylaws were unenforceable because they imposed an automatic minimum 20‑day delay (and related mechanisms that could extend that delay) before stockholder written-consent action could take effect, a restriction not allowed by 8 Del. C. § 228 or *Datapoint*, and it therefore affirmed the preliminary injunction.


Allen v. Prime Computer, Inc., 540 A.2d 417 (1988)