McKesson Corp. v. Derdiger

793 A.2d 385 (2002)

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McKesson Corp. v. Derdiger

Delaware Court of Chancery
793 A.2d 385 (2002)

  • Written by Rose VanHofwegen, JD

Facts

McKesson Corporation (plaintiff) sued stockholder Howard Derdiger (defendant) to settle a dispute over the record date McKesson set to determine which shareholders were entitled to vote at an annual shareholder meeting. In June 2001, McKesson scheduled the annual meeting for July 25, 2001, and set a record date of May 25, 2001, 61 days before the meeting. The applicable Delaware statute specified that the record date must be at least 10 and no more than 60 days before the meeting. Because stocks markets closed for three days over Memorial Day weekend, McKesson’s shareholders were the same at the close of trading on Friday, May 25, as on May 26, 27, and 28. In addition, a previous Delaware decision had evidently upheld a record date of 61 days before a meeting. However, after examining that 1987 case, Derdiger’s counsel found the record date in the opinion was a typographical error off by exactly one day, meaning the court meant to uphold a record date 60 days before the meeting. Derdiger’s counsel delivered a letter to McKesson on July 17 asserting that the May 25 record date did not comply with the Delaware statute. McKesson’s counsel responded insisting that the record date complied and that McKesson would hold the meeting. Derdiger’s counsel replied that the meeting and any actions taken at it would be void. McKesson held its meeting, and the stockholders overwhelmingly approved management proposals while disapproving stockholder proposals. McKesson sued for a declaratory judgment to confirm the validity of the record date and the actions taken at the meeting.

Rule of Law

Issue

Holding and Reasoning (Chandler, J.)

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