White & Case secures victory for Braemar Hotels & Resorts in shareholder activism dispute

Global law firm White & Case LLP has secured a significant victory for Braemar Hotels & Resorts, Inc. in the United States District Court for the District of Maryland, successfully defeating a motion for a temporary restraining order and preliminary injunction brought by dissident shareholder Brancous, LP1, which effectively moots the case.

Brancous alleged improper manipulation of the company's bylaws and violations of federal securities laws in connection with the rejection of director nominations. With only ten days remaining before Braemar's annual shareholder meeting, Brancous sought to postpone the meeting, compel the company to include its director nominees on the company's proxy card and invalidate votes cast by other shareholders.

Following expedited briefing and a hearing, the court issued a decisive victory to Braemar, finding for Braemar on every argument. The court agreed with Braemar's analysis of the relevant Securities and Exchange Commission (SEC ) rules, concluding that Brancous's claims under Rules 14a-19, 14a-3 and 14a-9 were not viable because Brancous had not mounted a proxy contest, and the company was not required to include nominees it had rejected on its own proxy card. The court further held that the Maryland business judgment rule protected the Board's actions, noting that even accepting plaintiff's theory, the conduct alleged fell short of the fraud or bad faith required to overcome the strong presumption of good faith. The court also found that Brancous's delay in seeking relief was unjustified and independently fatal to its claims, emphasizing that equity requires diligence and that self-created emergencies do not warrant judicial intervention.

A multi-practice White & Case team handled the representation. The litigation was led by Global Co-Chair of Litigation Glenn M. Kurtz and associate Camille M. Shepherd and included associate Lance Zhong (all in New York). M&A partners Richard Brand and Erica Hogan, with associate Edward Ernst (all in New York), advised Braemar in connection with a number of corporate matters, including the annual meeting.

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