Yahoo! Tries To Hide Parts Of Lawsuit From Public, Icahn (YHOO)
In a letter sent Friday to the judge overseeing the case in Delaware, a lawyer for the shareholders argued Yahoo is trying "to whitewash embarrassing documents" because the company thinks the information will damage the board's efforts to repel a challenge by activist investor Carl Icahn...
Yahoo is trying "to sanitize the public record and maintain a cloak of secrecy regarding unflattering evidence of breach of fiduciary duty," shareholder attorney Joel Friedlander wrote in a letter to Chancellor William B. Chandler III
The redacted documents include information about an employee severance plan that Yahoo adopted shortly after Microsoft made its initial bid Jan. 31 and notes about a conversation between Yang and Microsoft CEO Steve Ballmer, Friedlander wrote.
It's standard procedure for companies to redact information if their suits ever get to trial. But count on Carl Icahn to make hay from this: The AP dryly notes that "the information would be particularly damaging to the board if it suggests the directors deliberately took steps to make Yahoo more expensive for Microsoft."
We doubt they implemented the plan just to make the company more expensive--but retention and spiteful self-enrichment-in-the-event-of-a-takeover were certainly on their minds. In any event, we figure the new severance plan would have added another $1 billion to $3 billion to MSFT's costs.
See Also: How Much Will Yahoo's New Severance Plan Cost Microsoft?
-A humble SAI reader
Yahoo guys go down in history as idiots.
Vasanth,
I would say that this is the time for Yahoo to have a turn at a testing of their credibility. So far they've been credible to my mind, and I'm usually a difficult observer to convince.
From the start I'd assumed that Yahoo's change of control severance plan was designed for r-e-t-e-n-t-i-o-n of employees under the difficult personnel environment of MSFT's unsolicited assault, but would not ordinarily grant free walk-a-ways of extended severance benefits except under bonafide merger related difficulties: relocation distance, nearness to retirement, difficult domestic reorganizations (shifts, separations, extraordinary family matters, etc.), or some other reason Yahoo considered worthy of extended benefits... but not just because some MSFT-hating employee wanted a few months of free ride.
I still say that this might not have varied demonstrably from what MSFT intended for typical severance benefits after the merger anyway, and I suspect it could've easily been adapted to that purpose.
We'll get to find out eventually. I say I'll be closer to right on the matter.
Anybody want to walk out on this windswept ledge with me and go on the record with an opinion?
Henry, want to call my hand?... Think about it and take a deep breath. You want to throw down with joeblow?
I say the Judge will either continue the repression under Yahoo's requests to protect confidentiality and possibly competitive reasons... or he'll make it public and it won't be the fearful monster cash-out that the Pundinistas claimed it'd be.
Apparently, we'll eventually discover the terms, and we might do so Monday according to a hearing on the matter that is scheduled in Delaware Chancery Court. I think the Judge can elect to make them public or repress parts of the plan if he considers them not to be of consequences to the plaintiff's case.
While any element of severance might objectively be considered a form of poison if abused (I've always detested Golden Parachutes), these poisons are often, if not usually, allowed by the Delaware code if they are not found to be designed purely as roadblocks to obtaining the best in shareholders' interests.
So far, Yang, Filo, Decker, the board and Bostock have all delivered on credibility. It'll be interesting to see if it holds true in this matter as well.
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