Can Shareholder activism go the wrong direction?

Discussion in 'Legal & Political Archive' started by elsie, Feb 9, 2015.

  1. elsie

    Way over there on the left
    Well-Known Member

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  2. oknow

    amboy wa.
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    to save on the clicking

    New York Church Taking Walmart To Court Over Gun Sales
    Clare O'Connor, Forbes Staff11 hrs ago
    Trinity Church sits in the shadow of lower Manhattan’s One World Trade Center, its brownstone Gothic Revival spire dwarfed by the Financial District’s surrounding skyscrapers.

    On 9/11, Trinity provided refuge from the plume of debris when the towers fell just three blocks north. The church survived without much damage. Today, it’s a landmark and site of remembrance as much as a place of worship.

    It’s also extravagantly wealthy, as far as Episcopalian churches go, thanks to the 215 acres England’s Queen Anne donated to the diocese in 1705, when the area was farmland. Trinity has sold most of that land over the years but remains one of Manhattan’s largest landowners. It estimates the value of its assets at over $2 billion.

    One of the smaller investments in Trinity’s diverse portfolio: about $2,000 worth of shares in Walmart. This spring, the church will face off against the big-box giant in a court case that could change the way public companies make business decisions.

    At issue, for Trinity: Walmart’s sale of guns with high-capacity magazines of the sort used in mass killings.

    The church’s rector, Rev. Dr. James Cooper, says he isn’t seeking a ban on the sale of assault weapons at Walmart. Rather, he’s fighting to force the world’s largest retailer to include a shareholder proposal in this April’s proxy materials, to be voted on at this summer’s annual meeting.

    Trinity’s proposal would require Walmart’s board to oversee the sale of “products that especially endanger public safety and well-being, risk impairing the company’s reputation, or offend the family and community values integral to the company’s brand,” as the document first filed with the Security and Exchange Commission last year reads.

    “Somebody is making decisions about what they sell,” Rev. Cooper told Forbes in an interview at the church’s well-appointed Wall Street offices, with views over the Hudson River.

    “Trinity doesn’t need to. We would just like them to tell us they have a system in place at the board level to protect the reputation of the company, its values, and protect the citizens who live in that community from extreme harm.”

    The church has singled out high-capacity assault rifles as the sort of product that should require board approval before hitting store shelves, questioning in its proposal “whether these guns are well suited to hunting or shooting sports” and recalling that such weapons “enabled many mass killings” in Newtown, Aurora, Tucson and elsewhere.

    AA99ZE9.img?h=270&w=270&m=6&q=60&o=f&l=f&x=835&y=641.jpg © Provided by Forbes Trinity Church rector Rev. James Cooper. Photo: Leo Sorel.

    It was the 2012 massacre at Sandy Hook Elementary School in Newtown, Conn. that proved the catalyst for Trinity’s legal action, says Rev. Cooper. He recalls having coffee hour chats with parishioners about ways to help, including shareholder activism.

    Months after the killings, Cooper and Trinity’s legal counsel Evan Davis took their concerns to Walmart head of investor relations Carol Schumacher. (Schumacher declined to be interviewed for this story.)

    Davis was keen to learn how the retailer decides, for instance, that it won’t sell CDs with Parental Advisory warning labels, but will sell assault rifles with the capacity for 30 rounds of ammunition.

    “If it were a video with somebody shooting up a school, or a rap song with somebody talking about shooting up a school, they wouldn’t sell it,” he said. “So why sell the gun? It doesn’t make sense.”

    During their discussions, Walmart assured Trinity it takes gun safety seriously, echoing those sentiments in a statement to Forbes.

    “In areas of the country where we sell firearms, we have a long standing commitment to do so safely and responsibly through trained associates and in compliance with our standards, which greatly exceed what is required by law,” said spokesperson Randy Hargrove.

    “For example, we do not sell handguns in the contiguous U.S., and we do not sell high capacity magazines as an accessory or any firearms at We also conduct background checks, videotape sales of firearms at our stores and exceed the current legal requirements by requiring a ‘proceed’ response on a background check before we transfer a firearm.”

    Unable to get a satisfactory response from Walmart on board oversight, Trinity decided to submit a shareholder proposal in December 2013 for inclusion in the company’s 2014 proxy materials.

    The retail giant issued a preemptive strike, arguing to the Securities and Exchange Commission that Trinity’s proposal would interfere with the company’s day-to-day operations. The SEC sided with Walmart, issuing a no-action letter permitting the retailer to exclude the church’s submission from its 2014 annual filings.

    Davis and Cooper next took their case to Delaware’s federal courts. In November, following months of back-and-forth briefs from both sides, U.S. District Judge Leonard Stark decided in Trinity’s favor, ordering Walmart to let shareholders vote on the church’s proposal. In January, Walmart appealed.

    The big-box chain will now face Trinity in Philadelphia’s Third Circuit Court of Appeals in late February or early March. Bentonville, Ark.-based Walmart has hired Los Angeles lawyer Theodore Boutrous, who represented the company in decade-long class action gender discrimination case Dukes vs Walmart. The Supreme Court threw the case out in 2011.

    Walmart has support in the form of amicus briefs from, among others, the National Association of Manufacturers, the American Petroleum Institute, the Business Roundtable, the Society of Corporate Secretaries and Governance Professionals and the Retail Litigation Center.

    “We believe that the SEC staff was correct in finding that Walmart was allowed to exclude Trinity’s shareholder proposal from its 2014 annual meeting proxy materials,” said Walmart in a statement to Forbes.

    “The District Court’s ruling has far reaching implications for the entire retail industry, because it could force public companies to have a shareholder vote to make decisions on ordinary business matters, such as what products a retailer sells. The ruling reverses 40-year old SEC guidance allowing shareholder proposals to be excluded if they involved a company’s ordinary business operations.”

    “Trinity’s proposal would interfere with Walmart’s ordinary business operations by seeking to regulate Walmart’s daily decisions on the hundreds of thousands of products sold in our stores, wholesale warehouse clubs, and online. Trinity’s proposal would also be difficult to implement because it is vague and indefinite, refers to highly subjective and loosely defined categories of products and is unclear on which of the hundreds of thousands of different products sold in our stores, wholesale warehouse clubs, and online would be covered.”

    In the next few days, Cornell University Law School professor of corporate and business law Lynn Stout will file an amicus brief in support of Trinity Church on behalf of more than 20 of her fellow corporate law professors from various universities, all experts in corporate governance.

    “Trinity isn’t asking for an expansion of shareholder rights,” said Stout, author of The Shareholder Value Myth. “Walmart is asking for a restriction. It would be a dramatic new restriction in shareholder rights if the Third Circuit were to reverse the district court’s decision.”

    Rev. Cooper is set to retire as Trinity’s rector on February 15. He’s already briefed his successor, Rev. Dr. William Lupfer of Portland, Oregon’s Trinity Episcopal Cathedral, on the case. Legal counsel Evan Davis — also a church warden — plans to stick with it, even if the appeals process proves arduous.

    “Trinity has been here for 318 years,” Cooper said. “We have some things that we can keep doing for a pretty long period of this time and this will be one of them.”
  3. ZA_Survivalist

    AK's all day.

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    What was that saying about if you didnt have a sword to sell your cloak and buy one?

    These pacifist types piss me off.. They wouldnt have a soap box to stand on wothout blood soaked ground.. VERY few religions havent spilled blood in their name...
    OLDNEWBIE likes this.

    State of Flux
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    Savvy Walmart share holders with a huge stake would vote to reject the meddling Rev. James Cooper's anti-gun BS as a money losing idea I'm sure!

    The less savvy ones, (myself?), never even open these proxy E-mail voting ballots that get sent to them all the time from companies they gamble off and on with on Scottrade or E-trade etc.. I've no position in WMT at the moment BTW. I would guess the amount of shares you own would determine the size of your vote???

    Now ideologue big money types like Warren Buffet or Bloomberg??? Their Votes mean something.
    Let's hope the courts continue to rule in favor of Walmart!

    Why is the Rev. James Cooper in the stock market anyway?? God's against gambling I thought, or at least God's spokespeople on earth should be!:mad:
  5. deen_ad

    Vancouver, WA
    Well-Known Member

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    <- Why there aren't any school shootings in Israel!
    Teacher with long gun slung over her shoulder!!!

    The ones we get say it's the number (not amount) of shares that determine the number (not size) of your votes.

    NRA Life Member, Benefactor Level
    NRA Golden Eagle member
    NRA Recruiter
    Defender of Freedom Award
    Washington Arms Collector Member
    Vancouver Rifle & Pistol Club member

    "A gun is like a parachute. If you need one and don't have it, you'll probably never need one again!"

    State of Flux
    Well-Known Member

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    Yeah, I sorta guessed close:rolleyes: The first time I got one I read it through and even considered Voting. That was when I thought I was a serious investor!
    Now I'm just a serious gambler and rarely hold stocks much over a year at a time!
    Your fooling yourself if you don't think it's gambling. The odds are way better than the casino though:cool:
  7. usagi

    Well-Known Member

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    i wonder if there are grounds somewhere here to revoke the church's tax exempt status?

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