Legal Question in Business Law in Delaware

Re: Stock holders meeting, election canceled.

I am an attorney with 17 years of corporate law expereince. As I understand the facts, the matter involves a Delaware Corporation. The corporation was holding its annual stockholders meeting. At the meeting someone suddenly made a motion to adjourn. The motion was seconded, and a vote was immediately taken. There was no discussion. The shareholders had not yet elected the directors at the time of adjournment.

Normally, Delaware Law requires that an election be held. ***If the annual meeting for the elections of directors is not held on the date designated therefor or any action taken by written consent to elect the directors in lieu of the annual meeting has not been taken, the directors shall cause the meeting to be held as soon as it is convenient.*****DEL. CODE ANN tit. 18 Sec. 211(c). It appears that the vote to adjourn was taken before any directors were elected.

If the President does not call a meeting to elect directors in the proper manner within 30 days, then you (or the group of shareholders that agrees with you) can file a petition with the Delaware Court of Chancery to force an election. If there is a failure to hold an annual meeting for a period of 30 days after the date designated for the annual meeting, or if no date has been designated for a period of 13 months after the latest to occur: the organization of the corporation; its last annual meeting; or the last action by written consent to elect directors, the Court of Chancery may summarily order a meeting to be held upon application of any shareholder or director, Id.

In order to assist you and your fellow shareholders, I would need to see a copy of the bylaws. I would also need to know the actual vote totals of the adjournment vote. When the vote to adjourn was taken, did the President set a date for a new meeting?

Thank you very much for giving me the opportunity to respond to your concerns. If you need further assistance email me at [email protected].

Sincerely,

Steven D. Rinaldi

Steven D. Rinaldi, P.C.

Suite 700

3 Bethesda Metro Center

Bethesda, Maryland 20814