Opinion ID: 2587489
Heading Depth: 3
Heading Rank: 3

Heading: Adequacy of Proxy Solicitation

Text: Sierra next argues that Goldbelt failed to disclose material facts and misled shareholders with false statements, and that the 1997 election approving the elder benefit was therefore invalid. She also asserts that Goldbelt violated 43 U.S.C. § 1629b(b)(2)(A) because the proxy statement did not set forth the text of the proposed amendment or the board's resolution. [19] Because the court is evenly divided on both issues regarding the adequacy of the proxy solicitation, the court affirms, without substantive discussion, the summary judgment entered by the superior court. [20] Two members of the court, Chief Justice Fabe and the author of this opinion, conclude that the proxy statement's failure to disclose the projected expense of the elder benefit proposal was not fatal. They reason that it is not necessary to include speculative or unreliableand therefore potentially misleadinginformation in the proxy statement. [21] They would hold that the circumstances here made it impossible to predict whether the new board that would be elected in 1997 would choose to implement the elder stock program to the extent the prior board proposed, especially given the new board's access to updated financial data. The other two members of the court, Justices Matthews and Bryner, have a different view as to this issue. They believe that proxy solicitations may not omit material facts, that is, facts which would likely be considered important by a reasonable shareholder in deciding how to vote. [22] The board in the resolution authorizing the amendment to the articles stated that it anticipates that the redemption price will be $10 per share so that each elder to whom 100 shares are issued would be entitled to a payment of $1000. Justices Matthews and Bryner would not reach the issue of the adequacy of the proxy solicitation independent of the requirements of § 1629b(b)(2)(A) because compliance with that subsection would necessarily make the proxy adequate under the Brown v. Ward standard. If they were to consider the adequacy of the proxy solicitation independently of § 1629b(b)(2)(A), they would hold that whether the board's resolution statement quoted above likely would be considered important by a reasonable shareholder in his or her choice of whether to vote yes or no on the proxy card was at least a question of fact inappropriate for resolution by summary judgment. Likewise, as to the second issue, Chief Justice Fabe and the author of this opinion would also affirm. They would hold that the proxy statement satisfied § 1629b(b)(2)(A). In their view, that subsection did not require the proxy statement to include a financial projection that would have been potentially inaccurate. Similarly, they conclude that the proxy statement adequately set forth the amendment or resolution. [23] Justices Matthews and Bryner disagree. They would hold that the proxy statement did not satisfy § 1629b(b)(2)(A) because it did not set forth the board's resolution. They note that a mere summary of the changes to be effected is insufficient to satisfy the requirements of this subsection. The subsection states that a summary may be sent in addition to the resolution, not as a substitute for the resolution. Congress has used the word and, not or, in reference to the summary. All four members of the court are unpersuaded by Goldbelt's argument that the proxy statement did not have to satisfy § 1629b(b)(2)(A). Goldbelt asserts that ANCSA's requirement that shareholders be sent a written proxy setting forth the amendment or resolution approved pursuant to paragraph (1) of § 1629b(b) applies only to amendments authorized by both subsections (g) and (h) of § 1606, but not to those amendments authorized under § 1606(g) alone. Goldbelt's reading of the statute is grammatically permissible. But it is contextually implausible for two main reasons. Goldbelt has not identified any logical reason why Congress might have intended to free this type of amendment from the solicitation requirements of § 1629b(b)(2)(A). And the legislative history found in the House Report on the proxy provision suggests that Congress intended that the solicitation requirements apply to amendments allowing corporations to issue elder shares under § 1606(g). [24]