LOVENHEIM V. IROQUOIS BRANDS, LTD.
618 F.Supp. 554 (D.D.C. 1985)
NATURE OF THE CASE: This case involves the right of shareholder to include political and social issues in proxy statements that are of little economic value to the firm. The court here ruled in favor of shareholders under Rule 14a-8.
FACTS: Lovenheim (P), owns shares of Iroquois Brands, Ltd. (D). P is distraught over the procedures that D uses to force feed geese. P submitted a proxy whereby shareholders would be allowed to vote on whether they were in favor of the treatment of the force feeding of geese. D refused to allow P's information to appear on proxy materials. D argues that the P's proposal has little economic impact on the firm and therefore it should not be compelled to include it in the proxy materials. D's argue that the economic impact of the proxy question concerned only 0.05% of the assets of the firm. P brought an action to compel D to submit his proposal on the proxy materials. P's right to compel D to insert information in the proxy materials turns on the applicability of section 14(a) and the shareholder proposal rule promulgated by the SEC, Rule 14a-8.3. D has refused to allow P's proposal to be included in proxy materials. D relies on Rule 14a-8(c)(5): an issuer of securities 'may omit a proposal and any statement in support thereof' from its proxy statement and form of proxy: if the proposal relates to operations which account for less than 5 percent of the issuer's total assets at the end of its most recent fiscal year, and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year, and is not otherwise significantly related to the issuer's business.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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