Gov. Ned Lamont. Gov. Ned Lamont. Photo: Michael Marciano/ALM

Some Connecticut law firms and most businesses will be saying—for the short term, anyway—so long to those long weekend retreats and annual meetings and hello to computers and smartphones. The reason: Gov. Ned Lamont has allowed for shareholders of stock and nonstock corporations to hold their annual meetings using technology that prevents in-person gatherings.

The order barring in-person annual meetings does not affect law firms that are partnerships or limited liability companies. It does affect law firms that are formed as professional corporations.

Lamont signed the emergency executive orders for stock corporations March 21 and for nonstock corporations on May 13.

Firms' role

Many state law firms had a part in helping the governor's office draft the measures.

Attorneys from Day Pitney, a firm which ranks 164th on the Am Law 200 with about 254 lawyers in 13 offices, worked with the governor's office on behalf of anxious clients.

Lane Watson, a partner in Day Pitney's corporate department and leader of the merger and acquisition group, said there are many upsides to the emergency executive orders and very few downsides.

"Our involvement with both orders came about because we had clients that were concerned about having to hold in-person meetings with COVID-19 still in the forefront," Watson said Thursday. "For both stock and nonstock corporations, we streamlined the language that allows for the corporations to having their shareholders or members have the meeting entirely remotely."

Unlike some states, such as Delaware, Connecticut's General Statutes have no bylaws addressing holding annual meetings remotely.

That's a mistake, said Matthew Gaul, chairman of the nonstock subcommittee of the business law section of the Connecticut Bar Association.

"It's a useful tool, and frankly, our statute is behind the times," said Gaul, a partner with Carmody Torrance Sandak & Hennessey in New Haven. "We did not have the mechanics set up in our state to have remote-only meetings or remote participation. Other states are ahead of us."

With regard to the most recent executive order for nonstock corporations, which include many charities, Gaul said, "They would have had to postpone their meetings if there was no executive order. A large percentage of charities and many nonstocks have their annual meetings in May. So this enables them to stick to their regular schedule of business."

Without the meetings being held, Gaul said, "It could have created difficulties for people coming off boards or joining boards. There are also, often, financial considerations."

The new orders, Watson said, leave it up to the business on how to conduct the meeting remotely. One rule in the orders states that it must be verified that the person communicating remotely is really a shareholder.

"You need to verify that the vote is valid," Watson said.

The executive orders allows annual meetings to be held remotely during the current crisis.

Watson said Day Pitney lawyers plan to work with bar association groups and the state General Assembly to enact permanent amendments to the statutes to allow for remote shareholders and member meetings for when the current health crisis is over.

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