Before August 1st
Last modified on Wednesday, 11 June 2008 07:26
The claimants who are suing Yahoo, Inc.’s Board of Directors have filed a motion demanding a trial on their claims before Yahoo’s Annual Shareholder Meeting on August 1st. They claim the early trial is needed to effectively challenge a Yahoo employee severance package that is the only issue blocking Microsoft’s offer to acquire Yahoo.
The plaintiffs have demanded a trial ahead of the company's Aug. 1 annual meeting to bring the so-called “poison pill” severance issue to light. The plaintiffs claim that the severance provisions could cost as much as $2.4 billion, and that this excessive amount has poisoned the deal for Microsoft.
The plaintiffs also contend that Yahoo has put this prohibitively costly provision in the deal to discourage Microsoft from acquiring Yahoo. Yahoo has countered that the cost is more likely between $514 million and $845 million and denied all of the claims in the lawsuit.
The lawsuit was filed in The Delaware Court of Chancery, which holds trials without juries. Delaware is a favorite corporate venue for company registration since disputes and merger battles can be fought there.
The lawsuit was originally filed in February by the City of Detroit's Police and Fire Retirement System and General Retirement System, two pension groups that have a substantial stake in the sale of Yahoo.
It states that Yahoo’s CEO, Jerry Yang, conspired with co-founder, David Filo, in order to find a way to maintain Yahoo's independence from Microsoft's buyout bid, as they both have a substantial personal interest in keeping Yahoo as a standalone company.