Cases / Notable Cases

Nutrisystem, Inc. Stockholder Litigation

Wolf Popper Secures Right of Nutrisystem Shareholders to Remove Directors

Wolf Popper, on behalf of the public shareholders of Nutrisystem Inc., brought a class action lawsuit challenging the company’s bylaw that required a two-thirds vote of the shareholders to remove a director.  Frechter v. Zier (Nutrisystem), C.A. No. 12038-VCG (Del. Ch.).  Wolf Popper argued that the bylaw provision violated Delaware law and that only a simple majority should be required.  In an eleven-page decision, Delaware Vice Chancellor Sam Glasscock III agreed with Wolf Popper, concluding:  “Section 141(k) [of Delaware’s General Corporation Law] unambiguously confers on a majority the power to remove directors, and the contrary provision of the Company bylaws is unlawful.”  Wolf Popper partner Carl Stine commented:  “We are gratified that Vice Chancellor Glasscock agreed with us that bylaws of Delaware corporations must comply with the director removal statute, and that the requirements of the statute are not ‘merely permissive,’ as the defendant argued.”  Press reports concerning the court's decision can be seen here and here.

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