## Facts

- Kistefos AS, a Norwegian investment company, owned about 22.2% of Trico Marine Services, Inc.’s common stock.
- Trico, a Delaware corporation, had bylaws providing for majority voting in director elections, but allowing a director who did not obtain the required vote to continue as a holdover director.
- Before Trico’s 2009 annual meeting, Kistefos submitted a package of bylaw proposals, including “Proposal 8,” intended to strengthen the majority-vote standard.
- Proposal 8 would make a director ineligible to serve if the director failed to receive the required votes and would cause the director’s term to expire immediately upon certification of the vote, creating a vacancy rather than permitting holdover service.
- Trico’s board refused to include Proposal 8, asserting it would be inconsistent with Delaware law and Trico’s certificate of incorporation.
- Kistefos filed an action in the Delaware Court of Chancery seeking declaratory relief that Trico improperly rejected the proposal and moved to expedite proceedings so relief could be obtained before the annual meeting.
- At the hearing on expedition, Kistefos stated expedition would be unnecessary if it could present Proposal 8 to stockholders; Trico argued it needed an expedited ruling to avoid prejudice to its position that Proposal 8 was invalid.

## Issues

1. Whether expedited proceedings were warranted to adjudicate the validity of the stockholder-proposed bylaw before the annual meeting.
2. Whether the court could deny expedition while ensuring stockholders could vote on the proposal and the proponent could solicit proxies, without impairing the company’s ability to later challenge the proposal’s legality.

## Decision

- The Court of Chancery denied Kistefos’s motion to expedite.
- The court ordered Trico to permit stockholders to vote on Proposal 8 at the annual meeting in the same manner as other proposed bylaws.
- The court allowed Kistefos to solicit proxies and present arguments for Proposal 8 in the same manner as other bylaw proposals.
- The court expressly preserved Trico’s ability to maintain and later litigate its position that Proposal 8 was invalid, and declined to rule on validity unless and until stockholders approved the proposal.

## Legal Principles

- Expedition is inappropriate where the asserted need for a pre-meeting merits ruling can be eliminated through interim relief that protects both the stockholder franchise and the responding party’s litigation position.
- Courts may structure interim relief to allow a stockholder vote on a governance proposal while reserving statutory and charter-consistency challenges for later adjudication if the proposal is adopted.
- A corporation’s participation in submitting a proposal to a stockholder vote need not be treated as acquiescence in the proposal’s legality when the court preserves the corporation’s right to contest validity.

## Conclusion

The court declined to accelerate merits litigation over a contested bylaw proposal before the annual meeting, instead requiring that the proposal be submitted to stockholders on equal footing with other bylaw amendments while reserving any ruling on legality until after adoption and preserving the company’s right to challenge validity.


Kistefos AS v. Trico Marine Servs., Inc., C.A. No. 4497-CC (Del. Ch. Apr. 14, 2009)