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
Press Coverage: Williams Companies Stockholder Litigation Trial Challenging Novel Anti-Shareholder Corporate Governance Provision
January 13, 2021
Forbes Highlights Pivotal Role of Private Shareholder Litigation in Checking Corporate Misconduct
June 29, 2018
BLB&G Allianz Structured Alpha Funds Team Announces New Case Filing
October 16, 2020
BLB&G Partner John Rizio-Hamilton To Speak on the Federal Bar Council’s Webinar, "Recent Trends in Securities Litigation: What You Need To Know For 2021 and Beyond"
April 22, 2021
Benchmark Names Seven BLB&G Partners as Litigation Stars
BLB&G Announces Elevation of Two Partners and Four Senior Counsel
January 24, 2020
BLB&G Partner Mark Lebovitch Quoted in Fortune magazine on Business Roundtable’s Repudiation of Shareholder Primacy
ISS SCAS Releases Top Securities Settlements Report: Bernstein Litowitz Leads the Field for Ninth Consecutive Year
February 11, 2019
Trends in Corporate Governance Litigation: A Lawdragon Discussion with BLB&G
October 19, 2020
BLB&G Announces Elevation of Four Partners and One Senior Counsel
January 26, 2021