InBev on Thursday filed suit in Delaware Chancery Court against its resisting target, Anheuser-Busch. The Brazilian-Belgian brewer is seeking a judicial declaration that the five Anheuser directors elected when Anheuser's board was staggered are eligible for removal without cause.
It is not disputed that the other eight Anheuser directors can be removed without cause and were elected after Anheuser de-staggered its board.
First, some background. A staggered board is a board where the election of directors is staggered over two or three years. Up until 2006, Anheuser's board was a staggered one with one-third of the directors up for election each year.
A staggered board is generally considered by corporate governance gurus to be an anti-shareholder one since among other things it functions as a takeover defense.