Jerry Silk Discusses Private Equity Trends and Impact on Shareholders on CNBC's Power Lunch
June 27, 2007
BLB&G Partner Jerry Silk was featured on CNBC's Power Lunch program, during which he discussed several recent private equity deals that have short-changed the pockets of shareholders and the general question of whether private equity buyouts are good for investors. According to Mr. Silk, management and directors have the "paramount obligation...[of getting] the best price for shareholders" when considering private equity buyouts, and failure to do so is a blatant breach of their fiduciary duty to maximize shareholder value.
Mr. Silk argued that private equity firms sometimes "entic[e] management with riches" in order to ensure their buyout offer goes through. This, in turn, can create conflicts of interest at the board and management level and compromise the process of getting the best price for the shareholders of the companies involved. Citing In re Ceridian Shareholder Litigation as an example, Mr. Silk points out that Ceridian directors and executive officers were promised approximately $50 million in "change in control" payments as part of their definitive merger agreement with Thomas H. Lee Partners, LP ("THL") and Fidelity National Financial, Inc. ("Fidelity"). Among several other allegations, the defendants are also accused of including a $165 million termination fee in order to deter and preclude any competitive alternatives to the deal with THL and Fidelity.
Mr. Silk closed by saying that if there is going to be a take over of a public company, "it has to maximize shareholder value, and the people that are running that process and conducting that auction have to be free of conflicts and have to make sure they're doing their fiduciary [duties]."
Also of Interest
Forbes Q&A with Jeroen van Kwawegen: The Role of Shareholder Litigation in Preventing Abuses by Boards and Management
April 29, 2016
Dr. Anatoli van der Krans Joins Bernstein Litowitz Berger & Grossmann LLP
September 2, 2015
Katie Sinderson Featured As a Law360 National Securities Litigation “Rising Star”
April 22, 2016
Benchmark Names Seven BLB&G “Litigation Stars”
Law360 Names BLB&G a 2017 “Securities Group of the Year”
January 23, 2017
Law360 Once Again Names BLB&G Among the Nation’s “Most Feared Plaintiffs’ Firms”
September 28, 2015
Hannah Ross Featured by Law360 Discussing Plaintiffs’ Bar Perspective on Securities Litigation
May 10, 2017
Benchmark Gives BLB&G its Top Ranking for the Ninth Year in a Row
Mark Lebovitch Selected National “Plaintiff Attorney of the Year” by Benchmark
February 11, 2016
The National Law Journal Profiles BLB&G – Winner of Financial Litigation Elite Trial Lawyers Award
December 19, 2016