Cleary Gottlieb obtained a victory on April 23, 2018, on behalf of client Telecom Italia (TIM) against Elliott Management.
The interim order, issued by the Court of Milan, is part of a strategy to oppose Elliott’s attempt to remove Vivendi’s nominees from the board of directors of TIM.
The interim order issued on April 23, 2018, by the Court of Milan in favor of TIM’s board of directors and Vivendi, the largest shareholder of TIM with close to a 24 percent holding, removes from the agenda of TIM’s annual shareholders’ meeting, to be held on April 24, 2018, Elliott’s proposal to revoke six of the 10 directors nominated by Vivendi in 2017, when TIM’s 15-member board was appointed, and replace them with Elliott nominees.
TIM’s board of directors had rejected Elliott’s request to add this agenda item because, in the meantime, those six directors and two additional Vivendi nominees had resigned. The resignations had made Elliott’s request moot, since they triggered the application of a clause in TIM’s bylaws according to which, when a majority of the directors ceases to be in office, the entire board must be reappointed, according to the so-called slate voting system. As a consequence, TIM’s board called a new shareholders meeting on May 4, 2018, for the election of the new board. However, Elliott reiterated its request to TIM’s board of auditors (similar to an audit committee) which, in an unusual move, overruled the board of directors’ decision, and instated Elliott’s proposal on the April 24, 2018, shareholders’ meeting agenda. Five TIM directors appointed in 2017 from the minority slate supported the board of auditors before the court. The court order suspends the board of auditors’ decision, thereby ensuring that the elections for the appointment of the entire TIM board of directors will take place on May 4, 2018.