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93 S. Cal. L. Rev. Postscript 1 (2019-2020)

handle is hein.journals/pstscrpt93 and id is 1 raw text is: THE UNDESIRABILITY OF MANDATORY TIME-BASED SUNSETS IN DUAL CLASS SHARE STRUCTURES: A REPLY TO BEBCHUK AND KASTIEL BERNARD S. SHARFMAN* In a 2017 Virginia Law Review article, The Untenable Case for Perpetual Dual-Class Stock,' Professors Lucian Bebchuk and Kobi Kastiel argued that time-based sunset provisions (the forced unification of shares into one share structure with equal voting rights after a certain period of time) should be a mandatory feature of dual class share structures (classes of common stock with unequal voting rights). This article has recently been used as authority by the Council of Institutional Investors (CII) to petition to the NASDAQ Stock Market (NASDAQ) and the New York Stock Exchange (NYSE) to amend their listing standards.2 The requested amendments would require companies seeking to go public with dual class shares to include in their certificates of incorporation a time-based sunset provision that would go into effect no more than seven years after the initial public offering (IPO) unless minority shareholders vote to extend *. Bernard S. Sharfman is chairman of the Main Street Investors Coalition Advisory Council, an associate fellow of the R Street Institute, and a member of the Journal of Corporation Law's editorial advisory board. Mr. Sharfman would like to thank Attorney David Berger and Professors John C. Coates IV, Jill Fisch, and Benjamin Means for their helpful comments on the letters that serve as the foundation for this Article. The opinions expressed here are the author's alone and do not represent the opinions of the commentators or the official position of any organization that the author is associated with. 1. Lucian A. Bebchuk & Kobi Kastiel, The Untenable Case for Perpetual Dual-Class Stock, 103 VA. L. REV. 585 (2017). 2. Letter from the Council of Institutional Inv'rs, to John Zecca, Senior Vice President, Gen. Counsel North America and Chief Regulatory Officer, NASDAQ Stock Mkt. (Oct. 24, 2018), https://www.cii.org/files/issues and advocacy/correspondence/2018/20181024%20NASDAQ%2OPetiti on%20ono2OMulticlasso2OSunsetso20FINAL.pdf. The CII sent an identical letter to the NYSE. Letter from Council of Institutional Inv'rs, to Elizabeth King, Chief Regulatory Officer, Intercontinental Exch., Inc. (Oct. 24, 2018), https://www.cii.org/files/issues_and advocacy/correspondence/ 2018/201810240%`20NYSE%/`20Petition%/o20on%/o2OMulticlass%/`20Sunsets%/o20FINAL.pdf. 1

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