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Tilray Brands Inc. (NASDAQ:TLRY) faces a new shareholder lawsuit accusing the Canadian cannabis company of misleading voting practices for a second consecutive year.
The legal complaint, filed on October 31, 2024 in the Delaware Court of Chancery, alleges that Tilray misled investors regarding the voting requirements to increase its authorized shares, reported Investing.com.
Disputed Voting Standards And Shareholder Allegations
According to the lawsuit, Tilray's proxy statements for the 2023 and 2024 annual meetings inaccurately presented the voting standards needed for approval. The plaintiff argues that the company required only a majority of votes cast, rather than a majority of all outstanding shares, to pass proposals that increased the number of authorized shares. This discrepancy, the complaint claims, invalidates the approval and subsequent issuances of new common stock.
The lawsuit contends that Tilray's board of directors breached their fiduciary duties by failing to provide accurate information.
The plaintiff seeks to block the company from holding a vote on the 2024 Authorized Shares Proposal at the upcoming annual meeting scheduled for November 21, 2024. Additionally, the lawsuit demands reimbursement of legal fees and related costs for the affected shareholders.