Vermillion shareholder George Bessenyei this week brought an action against the company in the Delaware Court of Chancery to force it to hold its annual shareholder meeting.
In the action, Bessenyei notes that Vermillion's last shareholder meeting was in June 2011 and asserts that the company is in violation of Section 211 of Delaware's General Corporation Law, which establishes the rules for corporate stockholder meetings.
This week, Vermillion received a notice from the Nasdaq Stock Market that it was not in compliance with the exchange's listing rule that companies hold an annual shareholder meeting no later than one year after the end of their fiscal year.
The notice said that unless Vermillion appeals the ruling, trading of its common stock will be suspended at the opening of business on Jan. 14, 2013.
Vermillion said that it planned to appeal the ruling and claimed that the meeting had been delayed due to a lawsuit brought last year against the company and its board of directors by Bessenyei and his fellow shareholder Robert Goggin.
That suit, also filed in the Court Chancery of the State of Delaware, sought to void a bylaw amendment passed by the board that eliminated a board seat and to halt Vermillion's annual meeting until the number of board seats up for election was determined (PM 6/15/2012).
At the outset of the case, the court granted a preliminary injunction stipulating that Vermillion not hold its annual meeting until at least 21 days after the court ruled on the plaintiffs' challenge. The court dismissed the suit with prejudice on Nov. 16, 2012.
Bessenyei acknowledged in his recent action the role of the previous suit in delaying the company's annual meeting, but noted that almost two months have passed since the dismissal of the suit and the company has not yet set a date for its annual meeting.
He further noted that he and Goggin had filed an appeal seeking to overturn their initial suit's dismissal, but asserted that this appeal "cannot be a basis for any further delay of an already well-overdue annual meeting."
Bessenyei is seeking by the action an order "summarily directing an annual meeting of stockholders... to be held at the earliest practicable date."