Mr. Chevedden submitted the normal proof of evidence, a letter from his broker. Since Mr. Chevedden holds his shares in "street name" (in his case, in the name of his broker), Apache wants the letter verifying his ownership to come from the Depository Trust Company (DTC), because they are actually the "record holder." Unknown to most people, when we don't trade shares, we actually trade "security entitlements." The trouble is, the DTC doesn't know whose shares they hold, so they couldn't possibly provide what is called a "broker letter," verifying ownership.

In Chevedden’s case, DTC knows of Northern Trust’s security entitlements but has no information about his broker or Chevedden. Northern Trust knows of the broker’s security entitlements, but has no information about Chevedden. Of the three financial institutions, only Chevedden’s broker has direct knowledge of his ownership of Apache’s security entitlements.

Therefore, if Apache wins, not only will they probably try to get Chevedden to pay for the cost of the expensive attorneys they hired for this SLAPP suit, shareowner proposals will essentially disappear, since no one will be able to get a “broker letter” from DTC.

Read more on this important case at Who Should Submit Shareowner Proposals?, where I've posted links to the court filings.

I like Bob Monks' suggestion to allow two classes of stock ownership: “passive shareholders, who choose not to exercise ownership rights, and stewardship shareholders, who already bear a fiduciary responsibility for funds under their management.” However, if Apache wins their lawsuit against Mr. Chevedden, "stewardship shareholders" will lose one of their primary mechanisms for holding directors accountable.