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  • Description
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  • AFSCME v. AIG
  • American Federation of State, County & Municipal Employees, Employees Pension Plan v. American International Group, Inc.

 

Southern District of New York

G&E represented a public service union in litigation against insurance giant American International Group, Inc. (“AIG”).  The plaintiff was seeking to compel AIG to include a proxy access proposal in the company’s proxy statement pursuant to SEC Rule 14a-8. Long considered a primary goal of corporate governance reform, proxy access would require corporations to publish the names of director candidates nominated by shareholders in the corporation’s proxy statement. The Second Circuit’s decision in favor of G&E’s client in this case reversed several years of no-action letters from the Securities and Exchange Commission’s Division of Corporation Finance that had effectively prevented shareholders from installing proxy access regimes at their corporations. This decision renewed the debate on the merits of proxy access that had stagnated following the Securities and Exchange Commission’s failure to adopt a mandatory rule in 2004, and confirmed that shareholders have an existing right under the federal securities laws to propose bylaw amendments to require their companies to publish the names of shareholder-nominated candidates.