116 3rd St SE
Cedar Rapids, Iowa 52401
The Delaware Chancery Court has upheld the decision by Lee Enterprises' board of directors to reject the director nomination notice submitted by Alden Global Capital.
The vice chancellor wrote in the decision Tuesday that Lee’s board “acted reasonably in enforcing a validly adopted bylaw with a legitimate corporate purpose” and that Alden “could easily have met the bylaw’s record holder and — by extension — form requirements had it not delayed” in preparing its nomination notice.
Lee officials said in a statement that Alden’s director nominations will not be recognized and any votes for them will not be tabulated at Lee’s 2022 annual meeting March 10.
Lee has nominated three directors for re-election — Lee's former CEO Mary E. Junck, Herbert W. Moloney III and current CEO Kevin D. Mowbray.
Alden had proposed two directors to replace Junck and Moloney, but Lee maintained Alden didn't properly nominate the board members. Alden sued in the Delaware court.
Following the ruling, Alden officials said it plans a "vote no" campaign in an attempt to force the resignations of Junck and Moloney.
“Now that the Delaware Court of Chancery has confirmed what we knew all along — that the Lee board made a proper decision in rejecting Alden’s attempted nominations — Alden has invented entirely new, hollow governance complaints in its continuing and transparent attempt to destabilize the board and the company’s leadership to help advance its grossly undervalued hostile offer for Lee,” Lee officials said in response.
“We have confidence that Lee’s shareholders will see through these disingenuous arguments and support Lee’s board.”
Davenport-based Lee Enterprises owns 10 newspapers in Iowa, including the Quad-City Times, Waterloo-Cedar Falls Courier and Sioux City Journal, and has a sharing a news-sharing arrangement with The Gazette.
It also publishes dozens of other newspapers nationwide including in Buffalo, N.Y.; Omaha, Neb.; Madison, Wisc.; and St. Louis. It's the third-largest owner of newspapers in the United States.
Its stock is traded on the New York Stock Exchange.
Alden Global Capital is a privately held New York City-based investment firm founded in 2007. Through acquisitions, it is now the second-largest owner of newspapers, behind Gannett.
Lee previously fought off a takeover bid from Alden, saying it wasn't in the best interest of the company. Alden is widely known in the newspaper industry for cost-cutting beyond norms.
Lee officials did not immediately respond to a request for comment on Alden's latest actions.