CCI - Delaware Court of Chancery Grants Expedition and Discovery in Hearing on Company's Last-Minute Expansion of Board | Benzinga
This is the Second Time the Board's Actions Have Presented a "Colorable Claim" Under Delaware Law
Crown Castle's Board of Directors Have Shown
Blatant and Cynical Disregard for Shareholders and the Delaware Court
Actions Highlight Years of Governance and Strategic Blunders That Have Cost Shareholders Tens of Billions of Dollars in Value
Court of Chancery Grants Discovery to Boots Capital Management to Investigate Whether Crown Castle Had "Legitimate Corporate Purpose" to Expand Board from 12 to 13 Seats
Court of Chancery to Hold Hearing in Early May to Assess Potential Shareholder Remedies, Including Potential Delay of Annual Meeting to Permit Adding 5th Nominee to Boots Capital Management 4-Person Slate
Court of Chancery Had Requested on March 8 That Crown Castle Give Prior Notice to Boots Capital Management of Major Corporate Developments,1 An Instruction That, in Boots Capital Management's View, The Board Ignored When It Expanded the Board From 12 to 13
Ted B. Miller and Nominees of Boots Capital Management Call on Shareholders to Directly Address the Crown Castle Board for Its Willful Disregard of Shareholders and the Court
Boots Capital Remains Supportive of Appointment of New CEO Steven J. Moskowitz;
Seeks Normal Course Resignation of One Director Upon Mr. Moskowitz's Appointment
HOUSTON, April 16, 2024 /PRNewswire/ -- The Delaware Court of Chancery yesterday granted expedited discovery into a breach of fiduciary duty claim against the Board of Directors of Crown Castle Inc. (NYSE:CCI) ("Crown Castle" or the "Company") for expanding the number of board seats in the critical, late stages of an ongoing proxy contest by investment vehicle Boots Capital Management LLC ("Boots Capital").
In a hearing yesterday, Vice Chancellor J. Travis Laster said that Boots Capital had presented a colorable claim that Crown Castle's Board's actions contravened their fiduciary duties under Delaware law when the incumbent directors expanded the number of seats from 12 to 13 after the appointment of a new CEO on April 10.
There is threat of irreparable harm in changing the rules in the midst of a proxy contest, Vice Chancellor Laster further noted in the court hearing.
The Court granted expedited discovery and a preliminary injunction hearing to be scheduled in early May, at which point the Court will assess Boots Capital's preliminary injunction motion, which will seek potential remedies including a potential delay of the May 22 annual meeting.
Vice Chancellor Laster had previously ordered, on March 8, that Crown Castle and its Board should give prior notice to Boots Capital if they were to undertake any material corporate action that would affect the proxy contest.
Boots Capital believes the Board willfully ignored the directives of the Court, which resulted in its latest challenge.
Boots Capital supports the appointment of Steven J. Moskowitz as new Crown Castle CEO. But when adding Mr. Moskowitz as both executive and new director, the Board did not reduce the board's overall size, electing to retain director and interim CEO Anthony Melone, who had been in his role since January 16. That action expanded the number of directors to 13 in the critical, late stages of the proxy contest, thus changing the rules and affecting the fairness of director elections.
Crown Castle continues to pay Mr. Melone extra compensation as a Special Advisor to the President and CEO, in addition to its continued payment of prior CEO Jay Brown, who was awarded a six-month consulting contract upon his resignation in January.
"The misguided corporate governance at the Crown Castle Board of Directors is on naked display for shareholders to see," said