The next big event in the two-month-old fight over Great Western Financial Corp. could take place in a Delaware court this week.
Sources from Washington Mutual Inc., which has a friendly merger agreement with Great Western, and H.F. Ahmanson & Co., which has a hostile offer on the table, said the Delaware Chancery Court could rule as early as midweek on when Great Western should hold its annual meeting.
The timing of the court ruling will depend on when Great Western's independent inspector tabulates and certifies the results of the recently completed consent solicitation, which includes a question on the date of the meeting.
The Delaware judge said Friday that he would not rule on the question until the consents have been certified. This process is expected to be complete as early as Wednesday but could take longer.
"I suspect we will be in court that day," said an Ahmanson source, referring to the day the consents are certified.
The timing of the meeting has emerged as the pivotal issue. Ahmanson wants the meeting to take place quickly because it fears that Great Western wants to hold a special shareholder meeting-at which the Washington Mutual offer could be put to a vote-ahead of the annual meeting. Ahmanson wants the annual meeting first because it has proposed three directors of its choosing for election at that meeting.
On Friday, however, Great Western set the annual meeting for June 13, more than a month after the date that Ahmanson had requested.
A source in the Great Western camp said it was possible that Great Western could hold a special meeting before the annual meeting.
Great Western contends that it is not delaying the annual meeting but rather following customary regulatory procedures. Those include the setting of a record date (the day that determines shareholder eligibility); receiving approval from the Securities and Exchange Commission on its proxy materials; and allowing shareholders enough time to review those materials before the meeting.
In its civil complaint filed Friday, however, Ahmanson charged that Great Western had flat-out refused to hold its annual meeting before voting on the Washington Mutual offer, presumably at a special meeting, and that such conduct constitutes a violation of its fiduciary duty.
What is more, for Great Western to ignore the results of the consent solicitation, assuming a majority of its shareholders supported one of the proposals that calls for an earlier meeting, would represent "an unlawful manipulation of corporate machinery," according to the complaint.
Resolving that question will be the task for the judge. Ahmanson has said it received enough votes on the consent solicitation to force Great Western to hold the meeting by May 6. If the final tabulation proves that to be correct, the judge will be forced to determine who has greater authority on this question-Great Western's board or its shareholders.
On Monday, Ahmanson also charged that the main reason for Great Western's delay was that there were questions about Washington Mutual's ability to use a pooling-of-interests form of accounting for its proposed merger.
Ahmanson said that at the court hearing Friday a Great Western lawyer said the company could not predict when the special meeting might be because the SEC was still considering questions raised by Ahmanson on this matter.
Great Western in a statement called the assertions "absolutely false, a gross misrepresentation of what was said, and totally inaccurate as to conclusion and import."
