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Effectuation or Alteration? — Court of Chancery Finds Preferred Stock Did Not Have Separate Vote on Automatic Conversion Eliminating the Series
October 3, 2012 Read the memo
A recent Delaware Court of Chancery case, Greenmont Capital Partners I, LP v. Mary's Gone Crackers, Inc. again highlights the contractual nature of preferred stock rights and that, when reviewing whether corporate actions may conflict with any of those rights, the court will generally uphold the independent legal significance of each action taken as it occurs, rather than looking at the ultimate consequence of multiple related corporate actions.