Proxy statement by shareholders opposing shareholder approval of settlement trust contained materially false or misleading statements. Limited authority to amend trust does not grant board authority to amend terms of trust "as they see fit." Since board has exclusive statutory authority to appoint trustees, it is untrue that trust agreement irrevocably delegates appoint authority from the shareholders. Receipt of proxy statement with trust agreement does not neutralize misrepresentations.
Koniag, Inc. is an Alaska corporation, incorporated under the Alaska Native Claims Settlement Act[1] (ANCSA) as a regional corporation. In December 1997 Koniag held its annual shareholders meeting in Kodiak (1) to elect three directors to the board of directors for three-year terms; and (2) to vote on Proposition 1, which provided for the establishment of a permanent fund as a settlement trust under the provisions of ANCSA.Koniag shareholders Diane Cooper, Jana Larsen-Horne, and Judy Meidinger sought election to Koniag’s board and solicited proxies in October and November 1997. These three candidates (the Meidinger slate) opposed the adoption of Proposition 1, and their proxy solicitation statements urged voters to reject the trust proposal.In December 1997 Koniag sued the Meidinger slate for proxy solicitation violations and defamation. Koniag’s complaint alleged that the Meidinger slate made numerous materially false or misleading proxy solicitation statements. The Meidinger slate counterclaimed for breach of fiduciary duty, intended consequences, intentional infliction of emotional distress, and abuse of process.
Clarifies what shareholder communications and voting-related conduct trigger (or don�t trigger) regulatory and corporate-law requirements.