Marcato Capital Management on Monday sued the manufacturer of UGG boots, Deckers Outdoor Corp., in the Delaware Court of Chancery in a bid to force a vote on the hedge fund's board nominees and avoid more than $120 million in financial penalties against the company.

The lawsuit was the latest escalation in a proxy fight launched last month by Marcato's Mick McGuire, who has been pressuring the company into a sale. Marcato, which holds an 8.4 percent stake in Deckers, has proposed its own slate of 10 directors to replace Deckers' entire board and seize control of the company.

In a 32-page complaint, Marcato said Deckers has refused to approve its nominees, arguing it would trigger a change-of-control provision that would force $103 million in debt to come due under a credit agreement and trigger $19 million in equity awards and payments to Deckers' executives.

The hedge fund asked the court to enforce the Dec. 14 date for the planned stockholder meeting and to designate its nominees as “continuing directors” in order to disable the provision in the agreement.

“Quite simply, the board has no good faith basis to believe that the Marcato nominees pose a danger to the interests of the company or the stockholders, and therefore must approve and nominate the Marcato nominees in accordance with their fiduciary duties,” Marcato said. “The board's refusal to approve and nominate the Marcato nominees serves no corporate interest and has no purpose other than to maintain the director defendants in office.”

Deckers has said that Marcato's request was not in “the best interests of the company and its stockholders,” and that it lacks the ability to alter the terms of the credit agreement before the election of a dissident slate of directors. On Tuesday, the company said it would vigorously defend the action.

“Our annual meeting of stockholders is already scheduled for Dec. 14, 2017,” Deckers said in a statement. “Marcato's lawsuit is unnecessary, a distraction from our successful transformation, and a self-serving attempt to advance its own interests at the expense of all other stockholders.”

Marcato said that the Dec. 14 meeting date is likely a violation of Delaware law, which requires, in most instances, that companies hold the annual gatherings within 13 months of each other. The upcoming meeting is scheduled 15 months after the stockholders last met in September 2016.

Marcato said Deckers has not yet confirmed the date of the annual meeting amid concerns from the board that a proxy contest would hamper the company's busy winter shopping season. But Marcato said Deckers had “manufactured” the crisis by delaying the meeting until mid-December, and it feared that Deckers would just try to postpone the meeting again.

“The board's refusal to confirm the annual meeting date bolsters Marcato's concern that the director defendants may seek to hold on to their seats by delaying their day of reckoning at the ballot box. The court should not permit the company to stall corporate democracy any longer,” Marcato said.

Marcato is represented by a team of attorneys from Cadwalader, Wickersham & Taft, which recently advised the hedge fund on its successful proxy context against Buffalo Wild Wings Inc., which won Marcato three out of four seats on that company's board.

The Delaware case is captioned Marcato International v. Gibbons.