Also known as: voting trusts
Written by attorneys · grounded in primary & secondary sources — see below
A mechanism by which one or more shareholders confer on a trustee the right to vote or otherwise act for them. Shareholders create the mechanism by signing an agreement that sets out its provisions and transferring their shares to the trustee so that the trustee becomes the record owner.
Vincente Vukovic and two other minority owners of Velocity Logistics sign a voting trust agreement naming Valor Capital as trustee and transfer their shares into the trustee's name on the corporate books. Valor Capital registers the shares and prepares the required list of beneficial owners. The trustee then votes the block at the annual meeting on a proposed merger.
Valerie Voss, holding a controlling stake in Vega Motors, executes a voting trust agreement with Virgil Volpe as trustee and delivers her share certificates for registration in the trustee's name. The trustee attends board meetings and casts votes on strategic matters. The arrangement centralizes voting power without further shareholder approval.
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Viktor Voronin and other managers of Vertex Pharmaceuticals deposit their shares into a voting trust designating a single trustee. The trust structure gives the trustee sole authority over the shares during a contested acquisition. The device strengthens management's position in the ensuing board vote.
Vivian Vaughn and fellow shareholders of a public company place shares in a voting trust to coordinate votes on a merger proposal. After the trustee votes the block, dissenting owners sue claiming the trust improperly influenced the outcome. The court examines whether the trust complied with formation requirements.
Vera Vargas and other minority holders in a closely held firm create a voting trust to ensure coordinated action on major transactions. When the majority later proposes a restructuring, the trustee exercises the pooled votes. The minority later invokes the trust in litigation over whether additional protections should have been negotiated.
Shareholders must sign a written agreement that sets out the provisions of the trust and grants the trustee the right to vote the shares. They must also transfer the shares to the trustee so the trustee becomes the record owner.
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No. The statute requires the trustee to prepare and deliver the list and agreement after the trust is created, but the delivery obligation is a separate transparency duty. The trust itself comes into existence upon signing and transfer of shares.
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The trust becomes effective on the date the first shares subject to the trust are registered in the trustee's name on the corporation's books.
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Yes. The statute permits the agreement to include any provisions consistent with the trust's purpose, so the parties may restrict the trustee's voting power to designated subjects such as a single merger or board election.
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…of the corporation, but it does benefit the holders of the remaining shares by enhancing their value. Similarly, holders of voting trust certificates have been allowed reimbursement of their expenses from the corporation where they succeeded in terminating the voting trust and obtaining for all certificate holders the right…