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July 17, 2018

Stroock Special Bulletin

By: Mark A. Speiser, Harold A. Olsen

In its recent ruling in In re Franchise Services of North America, Inc.,  the United States Court of Appeals for the Fifth Circuit held that an investor was not prevented from exercising its voting rights to prevent a corporation from filing for bankruptcy, even though that investor was controlled by a creditor of the company.  However, the ruling is not a general stamp of approval for the “golden share” or other “blocking position” creditor strategies—in fact, the court was careful to point out that it did not view the case as involving a golden share at all.
 
This Stroock Special Bulletin provides an overview of the case and addresses some of the key points from the Court’s decision.

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