Shareholder Activism In Bermuda

There are thousands of companies registered in Bermuda. Many of those are exempted companies which conduct business outside of Bermuda and are publicly listed on foreign stock exchanges, such as the New York Stock Exchange, the London Stock Exchange, or the Stock Exchange of Hong Kong. It is therefore often the case that Bermuda shareholder activism scenarios emerge in relation to publicly traded companies which are subject to Bermuda law in addition to foreign securities laws and listing rules. This can create an occasionally confusing interplay between the more familiar laws and rules of the foreign jurisdiction and the requirements of Bermuda law.

Legal issues that may arise under Bermuda law in a cross-border shareholder activism scenario include, for example, the lack of rights accorded to beneficial shareholders, the unsettled validity of shareholder rights plans (also known as "poison pills"), and the differing interpretation under Bermuda law of certain bye-law provisions