As described in a prior post, on May 14, 2018, certain members of the CBS board filed suit in Delaware seeking authorization to issue a special dividend intended to dilute the voting control of NAI, CBS’s controlling stockholder.
The majority of the CBS board (other than three directors with ties to NAI) subsequently considered and purported to approve a dividend of a fraction of a Class A (voting) share to be paid to holders of both CBS’s Class A (voting) common stock and Class B (nonvoting) common stock for the express purpose of diluting NAI’s voting interest in CBS, with the payment of such dividend conditioned on Delaware court approval.
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This blog post was republished as, “Lessons Learned From the CBS-NAI Dispute, Part VI: Board Access to Privileged Communications With Company Counsel,” by Harvard Law School Forum on Corporate Governance and Financial Regulation on November 14, 2018.