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Judge OKs Settlement In Yahoo Shareholder Suit

Posted by ScuttleMonkey on from the play-nice dept.

narramissic writes "On Friday, Judge William Chandler III of the Delaware Court of Chancery approved a settlement that will roll back a Yahoo employee severance that was implemented by Yahoo's former leaders. Some investors, including the vocal Carl Icahn, described the plan as a poison pill, arguing that the severance payouts would be so expensive that no company would want to acquire Yahoo. The settlement narrows the reasons why employees can quit and receive the severance, removing some of the incentives for them to leave the company in the event of a Yahoo acquisition, whether by Microsoft or some other suitor."

1 of 40 comments (clear)

  1. Judge works for profitability of investment grps? by Keith_Beef · · Score: 2, Interesting

    If I've understood, and this is not necessarily the case, I admit, the judge has just decided that he is authorized to modify contracts in order to give financial benefit to particular groups of investors. He is effectively interfering in the market. Is that his job?

    Let's imagine that I enter into an employment contract with a company, and this contract says that in certain circumstances I can leave and get a payout (let's say 12 months salary).

    This payout is to compensate me for the time it will take for me to find another job. The cost and risk in known up front to both parties; the company and me. The contract is signed by authorised signatories of the company, who get this authorisation from the directors, who ultimately are authorised by the shareholders to make decisions about hiring and compensation policy.

    Now along comes a judge, who says "I think that this contract is detrimental to the share price, ergo detrimental to the finances of certain shareholders; I have decided to unilaterally modify or annul this contract as I see fit".

    The judge is appointing himself to be a kind of super-president of the company: not elected to the board by shareholders, but with some kind of moral right to interfere in the company's policies and practises.

    Please feel free to correct me if I've got hold of the wrong end of the stick, but from reading TFA, that is my interpretation.

    K.