In a dramatic escalation in corporate America, shareholders of LifeVantage Corp., the Utah-based purveyor of anti-aging products and wellness goods, have launched a legal crusade in Delaware’s Court of Chancery. The suit, filed Wednesday, aims to dismantle the company’s recent maneuver to fortify its board of directors against legal accountability, alleging a breach of Delaware state law.
LifeVantage Stockholders Sue In Del Over Board Protections : The Crux of the Controversy
The core of the dispute revolves around a stockholder rights plan, set in motion on August 31. This plan, according to the lawsuit, crosses legal boundaries by seeking to exonerate LifeVantage’s board from accountability for potential fiduciary missteps. The legal document emphatically argues that Section 30 of this plan constructs an impregnable fortress around the board, effectively placing their decisions beyond the reach of equitable scrutiny – a move considered overstepping the allowances of Delaware’s General Corporation Law.
Key Players in the Legal Drama
The litigation was initiated by Michael Morris and Jana L. Morris, vested with preferred share purchase rights in LifeVantage. This legal challenge targets a lineup of corporate heavyweights, including outgoing and incoming board chairmen Garry Mauro and Raymond B. Greer, alongside CEO Steven R. Fife and several other board members. The case further notes a recent shift in leadership, with Greer taking the chairman’s reins from Mauro, who remains a board director.
LifeVantage Stockholders Sue In Del Over Board Protections: Navigating the DGCL
The stockholder rights agreement, ratified in November during the annual meeting, is accused of violating specific sections of the Delaware General Corporation Law. Sections 102(b)(7) and 141(a) form the epicenter of this dispute. While Section 141(a) empowers the board with corporate governance, Section 102(b)(7) limits directors’ personal liability. However, the plaintiffs argue this does not absolve them from the inherent duties of loyalty and care, nor does it prevent other forms of legal recourse.
Echoes of Past Legal Battles
The complaint draws parallels to a similar situation faced by Hilton Hotel Corp. in 1985, which also saw its stockholder rights agreement annulled by the Chancery Court. More recently, Chancellor Kathaleen St. J. McCormick’s ruling in a separate case underscored the impossibility of evading equitable review beyond legislative permission.
The Plaintiffs’ Demands and Legal Representation
Seeking both declaratory relief and coverage of litigation expenses, the shareholders are represented by a trio of legal minds: Blake A. Bennett of Cooch and Taylor PA, Brian P. Murray of Glancy Prongay & Murray LLP, and Werner R. Kranenburg.
LifeVantage Stockholders Sue In Del Over Board Protections : An Ongoing Saga
As of Thursday, neither party had responded to media inquiries, leaving the corporate and legal communities abuzz with anticipation over the unfolding drama. Counsel for LifeVantage remains unannounced, adding another layer of mystery to this high-stakes corporate showdown.
