On January 14, 2014, hedge fund manager Sandell Asset Management Corp. (Sandell), which owns approximately 6.5% of Bob Evans Farms, Inc. (Bob Evans) common stock, filed a complaint in the Delaware Court of Chancery asking the court to invalidate the allegedly unilateral attempt by the Bob Evans Board of Directors (Board) to change the company’s Bylaws (Bylaws) to require a supermajority rather than a simple majority vote to amend them. In August 2011, Bob Evans shareholders voted to reduce the requirement of an 80% supermajority shareholder vote to amend most Bylaw provisions to a simple majority. Three months later, the Board reinstated the supermajority requirement, allegedly in contravention of Delaware corporate law. On January 28, 2014 – seemingly in response to Sandell’s multipronged campaign to effect governance reforms at the company – Bob Evans noted in an 8-K that its Board had amended its Bylaws to, among other things, allow amendments to the Bylaws by simple majority vote of common stockholders. This article summarizes Sandell’s factual and legal allegations and its other efforts in connection with its Bob Evans investment. For more on activist campaigns, see “Drawbacks of Being a Lone Dissident on a Board of Directors, Starting an Activist Campaign and Targeting Retail Investors Are Themes at Activist Investor Conference
,” Hedge Fund Law Report, Vol. 4, No. 6 (Feb. 18, 2011). For coverage of recent litigation involving the consent solicitation process at Delaware public companies, see “Lawsuits and Letters: TPG-Axon’s Playbook for Unseating a Recalcitrant and Underperforming Board of Directors
,” Hedge Fund Law Report, Vol. 6, No. 2 (Jan. 10, 2013).