1. Investors, Companies to Fight Over Who Pays Litigation Fees

    Investors, Companies to Fight Over Who Pays Litigation Fees

    ... fee exposure, among other criteria. CalSTRS will vote against corporate directors who support fee-shifting bylaws as they come up, and would support shareholder proposals limiting a company's ability to impose such bylaws unilaterally, Ms. Sheehan ...

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    1. Companies should have the option to have fee shifting in their bylaws.
    2. Investors really do need to understand that this issue is growing, and more companies are adopting these. If these become ubiquitous, then shareholder litigation is going to be fundamentally changed.
    3. I think there's still an open question what those fee-shifting bylaws should have.
    4. There is concern that there is some litigation that is unwarranted and wastes shareholder and company dollars. But fee-shifting bylaws might also deter meritorious litigation.
    5. I think at the end of the day we will find consensus.
    6. A provision like this — shifting risk to the owner — should require shareholder approval, and management should not be able to adopt it without first submitting it to ownership for approval.
    7. Whether that's accomplished by statute, court decision or shareholder vote, that's the way the issue should resolve, with unilateral action by management not permitted.
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