Swallow hard, Iroquois Brands Ltd.
Moral questions about goose liver pa te' are going to be on the proxy menu for the Greenwich, Conn., company's shareholders this year after a decision yesterday by Judge Oliver Gasch in U.S. District Court here.
Gasch issued a preliminary injunction ordering Iroquois to ask owners of its stock whether they want the firm to investigate animal cruelty charges in the force-feeding of geese in France.
From the geese comes pa te', which Iroquois imports and sells.
"I'm really pleased," said Peter C. Lovenheim, a Rochester, N.Y., shareholder and animal rights advocate whose battle to have the investigation proposal included on the proxy statement had been rebuffed by Iroquois.
"I would hope [the order] reasserts the rights of shareholders in all companies to bring moral issues to the attention of management," Lovenheim said.
An Iroquois spokesman said the company had no comment.
At issue is a 1983 Securities and Exchange Commission rule that allows companies to omit proposed proxy materials if they involve operations -- like Iroquois' pa te' -- that account for less than 5 percent of a firm's total assets.
But the rule also hinges on whether the proposal is, in the SEC's words, "otherwise significantly related to the issuer's business."
Iroquois, said the judge, saw the rule "solely in economic terms," while Lovenheim viewed humane treatment of animals as a pillar of western culture and cited a 1641 animal protection law of the Massachusetts Bay Colony for backup.
Calling interpretation of the SEC rule "a close question," Gasch sided with Lovenheim and ordered Iroquois to place the proposal in proxy materials to be mailed out April 6.
"The court cannot ignore the history of the rule which reveals no decision by the SEC to limit the determination to the economic criteria relied on by Iroquois," Gasch said.