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The answer to the puzzle is that the rule about fiduciary duty really is only relevant to who the beneficiaries are of financial transactions; it pretty much do
by chalst 5y ago
The answer to the puzzle is that the rule about fiduciary duty really is only relevant to who the beneficiaries are of financial transactions; it pretty much does not have anything to say about regular business decisions. No doubt some shareholders contacted their lawyers and were gently dissuaded by a legal reality check.
- cbsmith 5y agoShareholders did sue, and the threat of the lawsuit meant the board had to devote a lot of energy towards the Microsoft acquisition offer, which was unfortunately why the offer was a win-win for Microsoft.
- chalst 5y agoI checked, and not only did they sue but they reached a settlement, in Delaware of all places, the state least friendly to these kinds of claims. But the settlement had nothing to do with Yahoo failing to reach an agreement with Microsoft; it was to weaken a poison pill Yahoo had put into place that meant employees would get expensive severances in the event of a takeover. This kind of financial measure is bread-and-butter for corporate fiduciary law, and it doesn't contradict what I said. https://www.zdnet.com/article/yahoo-settles-shareholder-suit-partially-removes-severance-roadblock/ https://www.zdnet.com/article/yahoo-settles-shareholder-suit...
- cbsmith 5y agoIn fairness, that was the legal claim that they thought had the best chance of succeeding. That option for a poison pill had been in the arsenal pretty much since the company was formed. They sued because Yahoo failed to accept the agreement.