International Brotherhood Of Teamsters v. Fleming Companies

975 P.2d 907 (1999)

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Nature of the Case

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Facts

The Teamsters (P) owned sixty-five shares of Fleming Companies (D). In 1986, D instituted a shareholder rights plan with the term of the plan to expire in 1996. D adopted this plan as an anti-takeover method. P were critical of D's rights plan, seeing it as a means of entrenching the current board of directors in the event D became the target of a takeover. In 1996, P organized and introduced a nonbinding resolution for the annual shareholder meeting; it called for the D board to redeem the existing rights plan. The rights plan remained intact despite a majority shareholder vote in agreement with P to redeem it. P once again attempted reform and in 1997 put an amendment to vote to the company bylaws that required that any rights plans would need shareholder ratification. D refused to include that resolution in its 1997 proxy; the proposal was not a subject for shareholder action. P then brought an action in the Federal District Court for the Western District of Oklahoma. The trial court ruled that the plan D instituted effectively removed corporate authority regarding share marketability from the shareholders and vested it exclusively in the board of directors. P got the judgment and D appealed. D was forced to hold the vote, and the motion passed. The 10th Circuit submitted a certified question to the Oklahoma Supreme Court.