Under Section 223(a) of the DGCL, unless otherwise provided in a company's certificate of incorporation or by-laws, board vacancies may be filled by a majority of the directors then in office. If, however, the directors in office constitute less than a majority of the whole board, Section 223(c) allows stockholders holding at least 10% of the company's voting stock to petition the court to direct an election of the directors to fill the vacancies. In Canmore Consultants v. L.O.M. Medical International, a case of first impression, the Delaware Court of Chancery held that there is no presumption in favor of the plaintiffs' demand for election. Rather, Section 223(c) simply establishes conditions for standing, but requires the petitioning stockholders to bear the burden of persuasion on the balance of equities under the particular circumstances.

Following three director resignations from L.O.M. Medical International, the remaining two directors (who did not constitute a majority of the whole board) executed written consents appointing a third director. Following that appointment, the three directors executed written consents to appoint a fourth and fifth director. The plaintiffs filed an action asking the Court of Chancery to order a new election. The plaintiffs argued that since they satisfied the statute's standing requirements, Section 223(c) created a presumption in their favor for the court to find that they are entitled to a new election.

In finding for the defendants, the court held that Section 223(c) is permissive ("the Court of Chancery may, upon application...") and that the court is not required to compel a new election. Rather, Section 223(c) is a limited exception to the broad grant of authority to directors to fill vacancies under Section 223(a) of the DGCL.

In its analysis, the court differentiated the case at hand from other cases where the petitioning plaintiffs held a near majority of the outstanding shares and where an election had not been held in the previous year. The court found the following factors weighed in favor of the defendants:

While Section 223(c) does provide stockholders with a means to petition the court to force the board to hold a special meeting for the election of directors, stockholders must show that the balance of the equities favors that result. This review turns on the particular facts of the case and is not likely to favor stockholders if the company cannot afford to run a new election and the stockholders have lost previous contests.