Court rules Lee board’s decision was reasonable and justified; Alden may not nominate directors to Lee’s board this year
Lee Enterprises, Incorporated today announced that the Delaware Chancery Court has upheld the decision by Lee’s board of directors to reject the director nomination notice submitted by Alden Global Capital, LLC.
In the decision, the vice chancellor noted, among other things, that Lee’s board of directors “acted reasonably in enforcing a validly adopted bylaw with a legitimate corporate purpose” and that Alden “could easily have met the bylaw’s record holder and — by extension — form requirements had it not delayed” in preparing its nomination notice.
As a result of the Court’s ruling, Alden’s director nominations will be disregarded, and no proxies or votes in favor of its purported nominees will be recognized or tabulated at Lee’s 2022 Annual Meeting of Shareholders on March 10.
Lee’s board of directors issued the following statement:
“We are pleased that the Delaware Court of Chancery has affirmed the importance of orderly annual shareholder meetings and confirmed the decision by the Lee Board of Directors to reject as invalid the notice of nominations delivered by Alden. Based on the ruling of the Vice Chancellor, Lee will not recognize Alden’s nominations, and any proxies submitted, or votes cast, for the election of Alden’s director candidates will be disregarded.
“We urge shareholders to vote FOR all three of Lee’s proposed nominees — Mary E. Junck, Herbert W. Moloney and Kevin D. Mowbray — at our Annual Meeting to support the continued execution of Lee’s digital growth strategy.”
Lee shareholders are encouraged to visit https://investors.lee.net/2022-annual-meeting to view Lee’s proxy materials and additional information regarding the 2022 Annual Meeting.
If you have any questions or require any assistance in voting your shares, please contact Lee’s proxy solicitor:
Morrow Sodali LLC
509 Madison Avenue Suite 1206
New York, NY 10022
Shareholders Call Toll Free: 800-662-5200
Banks, Brokers, Trustees, and Other Nominees Call Collect: 203-658-9400
Email: LEE@investor.MorrowSodali.com
In response to the court's ruling, Alden issued the following statement in a news release:
“Despite today’s ruling from the Delaware Court, we remain steadfast in our commitment to provide Lee with competent leadership that will improve returns for shareholders and the quality of journalism for readers. Our affiliate will therefore be filing proxy materials for a ‘Vote No’ campaign to compel the resignations of Board members who are prioritizing their own interests over what is best for the company. Holding entrenched Board members Mary Junck and Herbert Moloney accountable for their decades of destructive decision-making, value destruction and enrichment at shareholders’ expense is important especially given Lee's poor corporate governance practices and significant underperformance since the acquisition of Berkshire Hathaway's BH Media Group publications. The troubling pattern of exorbitant payments over the course of two decades to companies related to Mr. Moloney, as well as decades worth of payments to Corporate Secretary C. D. Waterman III’s personal law firm, is why Lee's board must immediately launch a truly independent investigation of the many alarming related party payments and violations of Lee’s corporate policies. Our ‘Vote No’ campaign will act as a referendum on this entrenched duo’s many failures as fiduciaries and will act as a platform for stockholders to send a clear message that the corporate governance at Lee must be rectified and that the Board must be reconstituted in order to turn things around.
“Per Lee’s Bylaws, a director who receives a greater number of votes ‘AGAINST’ his or her election than votes ‘FOR’ his or her election must promptly tender his or her resignation to the Board. The Company’s director resignation policy therefore allows stockholders to compel the resignations of Directors Junck and Moloney for failing to serve shareholder interests. We are concerned that the Board may be trying to avoid accountability to its stockholders by attempting to have a ‘plurality’ voting standard apply to the election of directors whereby every incumbent director would be re-elected with as little as one vote being cast in such director’s favor. It is entirely disingenuous for the Company to deem this to be ‘contested election’ to enjoy the entrenchment benefits of ‘plurality’ voting when the Board has deemed all along our director candidates were invalid. We call on the Board to immediately confirm that the majority voting standard for the election of directors provided for under Lee’s Bylaws will be applicable at the 2022 Annual Meeting.”
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