CORPORATIONS--CORPORATE POLICY, THE "CURE-ALL" FOR PROXY SOLICITATION AILMENTS

Authors

David M. Michaelson S. Ed., University of Michigan Law School

Abstract

All too often lawyers and students of law are inclined to assume that some principle or formula· has become so deeply rooted in the law that it has acquired a sanctity which gives it an all-embracive effect, a "cure-all," as it were, for legal ailments. This has been the usual approach when the question has arisen of the propriety of spending corporate funds to solicit proxies. The ever-faithful panacea has been to say, quite automatically, that where the intra-corporate contest is concerned with matters of policy as distinguished from personnel of management, then corporate funds may be used to inform the stockholders of the policy issues and to secure their support of the views advocated by the management. While there has been an occasional case which would seem to reject this approach, the "policy" formula as a justification for corporate expenditures has enjoyed some popularity. A statement of the Delaware court indicates that the formula may have even grown beyond the point of being a judicial "cure" accepted primarily because of its supposed virtues. The Delaware court has said, "Moreover, for good or evil, the incumbent board of directors of a Delaware corporation may look to the corporation for payment of expenses incurred by them in soliciting proxies where a question of policy is involved."

Recommended Citation

David M. Michaelson S. Ed., CORPORATIONS--CORPORATE POLICY, THE "CURE-ALL" FOR PROXY SOLICITATION AILMENTS, 49 Mich. L. Rev. 605 (1951).
Available at: https://repository.law.umich.edu/mlr/vol49/iss4/7