Background
In a control contest, a side that captures a board majority will try to reshape the agenda of the shareholders' meeting in its favor. At a KOSDAQ-listed company, two outside directors appointed by a shareholder holding around 9% made up the majority of a three-member board. Meeting among themselves, they passed a board resolution altering the agenda of an extraordinary general meeting (adding their own director candidates, deleting the company's) and, when the company did not comply, applied for an injunction to table their items and bar the company's. Changchun represented the company and its representative director.
The Issue — Was That Board Resolution Valid?
The injunction presupposed that the board resolution in question was valid. Whether there were defects in convening the board and in the resolution therefore decided the case.
How Changchun Helped
Changchun (attorney Donghwan Shin) demolished the very premise of the injunction, showing ① that the representative director, the person properly authorized to convene, had already convened and given notice of a board meeting at the "company's meeting room," yet the two outside directors ignored this and held a separate board meeting on their own initiative at "their own office"; and ② that the resolution was accordingly made by a person without authority to convene, at a place that was not the proper venue, and without the attendance of the other director and the auditor, so that the defects were so grave as to render it non-existent or void — leaving the injunction with no ground to stand on.
The court dismissed the applicants' injunction application in full (judgment for our clients). The case pinpointed "procedural defects" to block the other side's attack in the opening phase of a control contest. (Outcomes may differ depending on the facts of each matter.)