Rarely is one happy to find themselves in the middle of a precarious situation, but a recent bench ruling and companion letter opinion from Vice Chancellor Lori Will in In re Aerojet Stockholder Litigation, No. 2022-0127-LWW, confirms that the middle, in a field of neutrality, is exactly where a company and its resources must remain in the midst of contested director elections involving a mixed bag of incumbent directors and insurgents.

Background

  • Tension Builds Between the Company’s Two Camps of Directors

Aerojet Rocketdyne Holdings (the company) has an eight-seat board of directors comprised of two four-seat factions. In the first faction sits Warren Lichtenstein, the Company’s executive chair and the founder of one of the Company’s significant stockholders—Steel Partners Holdings L.P. and affiliates (Steel)—and three other directors. In the second faction sits Eileen P. Drake, the company’s chief executive officer, and three other directors.