Shareholders Can Stop Sinclair's Anti-Kerry Propaganda Scheme -

[donsu]

Buy a Share and Act Now

http://www.democrats.com/

Talking Points Memo: "A stockholder in Sinclair Broadcast Group can file what's called a 'shareholder's derivative action' against the officers and directors of the corporation, which is publicly traded, to enjoin the officers and directors from using corporate resources in ways that do not benefit the shareholders. I believe Sinclair is incorporated in Maryland, and if so that's probably where the action should be brought. One stockholder has standing to sue and should request a temporary restraining order before the pseudo-documentary airs to prevent the officers and directors from misusing corporate property to benefit their political agenda ... because ordering the local stations to air the anti-Kerry propaganda will likely cause a loss of network advertising revenue, may in fact violate the stations' contracts with the networks they are affiliated with, and is almost sure to embroil the corporation in costly legal battles...." Someone can buy a share just for this purpose.

http://www.talkingpointsmemo.com/archives/week_2004_10_10.php#003642


Shareholders derivative actions are fairly complex; we need a Maryland corporate lawyer type. I'm a lawyer in Texas and was thinking to file the suit here but under Texas law, the acts of the officers and directors are governed by the corporate law of the state of incorporation, about which I know little. However, I do know that as a general principle, corporate officials have a fiduciary obligation to the stockholders, and everything they do is supposed to be for the benefit of the same. Normally a court won't second-guess the decisions unless the stockholder can show that there is no plausible benefit to the corporation in the complained-of act. What could the benefit be here?
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[Gothmog]

1. Shareholder derivative actions

Here is a thread where I discussed shareholder derivative actions briefly. See http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x1036619

Basically, unless one can establish making demand on the board would be futile, then the board has the right to first investigate and deal with the issue. To show demand futility, we would need to show that there were no directors who were independent of the Sinclair brothers or were otherwise tied into BC2004 or the GOP. If there are independent directors on the board, then the board may refer the matter to a special committee of these independent directors to review the matter.

The claim would be that Sinclair is making an illegal campaign contribution to BC2004 and that management is placing valuable corporate assets in danger (i.e. the FCC licenses) by this course of conduct.

It would be nice if we could get Bill Lerach or one of the big strike suit firms involved. If Milberg Weiss or Bill Lerach's new firm showed up making demand, then the board may not want to proceed with this plan.

[RollergirlVT]

2. Unfortunately time is not on our side

As you know legal action is always a time consuming endeavor. I was inclined to think that this whole stunt was really something else altogether because of the very legal ramifications you mentioned. Somehow I wonder if it is meant as a distraction of sorts. Ultimately though, I think the whole thing will simply backfire on the repubs. This is a clear demonstration of just how desperate they are. They stoop to public cheating. It is a disgrace to all republicans and only further demonstrates that the incumbent has no record to run on. It further demonstrates that they have no integrity whatsoever.

[Bake]

4. Lerach will do it if the money's there and the stock drops 10%.

And he'll do it in a heartbeat. He probably already has the complaint ready to file. Plus, he's a die-hard Democrat.

Bake

[donsu]

3. couldn't the shareholders ban together & at least speak out to the CEO?

nt

[dogpatch]

5. What about dumping its stock?

What if shareholdes sold en masee, or if someone like Soros bought a few million shares and them dumped them? The stock is already falling...

[SoCalDem]

7. Last night a poster told me that 95% of the stock is owned by

the 4 brothers...and they like the stations just the way they are./..

The remaining 5% is probably locked into 401k & mutual funds..

I got all excited when I saw the stock drop..but these guys are like the Washington Times.. They aren't in it to make money.. they are in it to advance a philosophy:(

[kerry-is-my-prez]

6. We should do it anyways for the future. We need to take back the media.

n/t