What Is a Proxy Solicitor?
A proxy fight occurs when a group of shareholders rallies together and decides to vote a certain way through designated proxy voters. A proxy voter is someone who votes on behalf of a shareholder in lieu of her absence. Proxy solicitation is the means to gathering these voters.
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Definition
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A proxy solicitor is a specialist or a firm hired by shareholders of a company. Their purpose is to search for proxy voters to vote in place of the shareholders. The goal is to amass a group of proxy voters to vote against members of a corporation's board. This group of voters is called a voting bloc.
Use
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A proxy solicitor may be hired during a hostile corporate takeover or when shareholders want to install new management to implement new procedures or policies. Hiring a proxy solicitor to start a proxy fight is typically a last resort. Shareholders may first attempt constructive conversation between themselves and the board. They may also make known their desires through a proxy statement.
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Consideration
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Because hiring a proxy solicitor is extremely expensive, there are several factors to consider being doing so. Shareholders must weigh their chances of success in the proxy fight. There is no sense spending excessive amounts of money on a proxy solicitor if their chances of winning are not probable.
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