In In re SS Body Armor I, Case No. 10-11255 (CSS) (Bankr. D. Del. April 1, 2015), U.S. Bankruptcy Judge Christopher Sontchi of the District of Delaware held the right of a stockholder to compel a debtor to hold an annual meeting for the purpose of electing a new board of directors continues during the pendency of a Chapter 11 proceeding, and the automatic stay does not apply to the exercise of that right.
The debtor, SS Body Armor, a Delaware corporation, filed for relief under Chapter 11 of the Bankruptcy Code. Although Delaware law and the company’s bylaws require an annual stockholder meeting, SS Body Armor had not held a meeting since it filed for bankruptcy in 2010. Jeffrey Brooks, a stockholder in the company, made a demand on the company pursuant to 8 Del. C. Section 211 to compel a stockholder meeting. The company refused to schedule a meeting. Brooks moved in the bankruptcy court for relief from the automatic stay as necessary. He argued that an action in the Delaware Court of Chancery to compel the company to convene a meeting would not violate the automatic stay or, in the alternative, he should be granted relief from the automatic stay in order to commence such a proceeding.
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