Wolf Popper Obtains Order from the Delaware Court of Chancery Requiring Rocky Mountain Chocolate Factory to Hold an Annual Meeting on January 9, 2020
On November 1, 2019, Chancellor Andre G. Bouchard of the Court of Chancery of the State of Delaware granted in part Wolf Popper’s motion for judgment on the pleadings in Geser v. Rocky Mountain Chocolate Factory, Inc., No. 2019-0764-AGB, and ordered Rocky Mountain Chocolate Factory, Inc. (“RMCF”) to hold an annual meeting to elect directors on January 9, 2020.
From 2015 through 2018, RMCF filed with the SEC its proxy statement for RMCF’s annual meeting in late-June, and held its annual meeting to elect directors in mid-August. On August 17, 2018, RMCF held its last annual meeting. Delaware General Corporation Law Section 211 requires that Delaware Corporations must hold an annual meeting at least once every thirteen months.
On April 26, 2019, AB Value Management, LLC (“AB Value”) filed a Schedule 13D with the SEC disclosing it owned approximately 7.53% of RMCF’s common stock, and on or about May 18, 2019, AB Value, nominated two individual for election to RMCF’s five person Board of Directors. On July 30, 2019, AB Value filed a preliminary proxy statement with the SEC seeking election of its director nominees.
On August 28, 2019, RMCF announced that its next annual meeting would take place on January 9, 2020. This was nearly 17 months after its last annual meeting and nearly 4 months after the Delaware statutory deadline to hold an annual meeting expired on September 17, 2019.
On September 20, 2019, Wolf Popper filed a Complaint asking the Court to order RMCF to hold an annual meeting. After extensive briefing and oral argument on Plaintiff’s motion for judgment on the pleadings and Defendants’ cross motion for summary judgment, on November 1, 2019, Chancellor Bouchard ruled from the bench that RMCF had not put forth a “compelling” reason for why it deviated from its track record of holding an annual meeting in mid-August, that he “ha[d] no doubt part of that strategy [to delay the annual meeting] was influenced by the fact that the company received a notice of a [competing] slate [of directors] that’s being proposed for two of the five board seats,” and that he was ordering RMCF to hold its annual meeting on January 9, 2020 “to prevent any mischief in trying to deviate from that schedule.” Chancellor Bouchard’s November 4, 2019 Order further provides that the record date for the annual meeting is November 22, 2019, the record date and the January 9, 2020 date for the annual meeting cannot be changed without an order from the Court, and that the shares of stock present at the annual meeting, either in person or by proxy, will constitute a quorum.