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Yahoo Fighting A Two-Front War For Survival

Publication Date: 
June 11, 2008
Benjamin Pimentel

Professors Joseph A. Grundfest and Michael Klausner are quoted in a Marketwatch article about the continuing court battle over control of Yahoo stemming from a recent failed takeover attempt by Microsoft:

Michael Klausner, a corporate governance expert from Stanford Law School, said he doesn't think the proxy fight would affect the judge's decision to go forward with the trial. He added that a target company's board usually "gets a fair amount of space" to exercise its discretion.

"In this case, I expect the court will allow Yahoo to keep its severance package in place, accepting the argument that Yahoo believes it is important to retain its employees and that the likely cost is not very high," he said.


Another Stanford law professor, Joseph Grundfest, said the fact that Yahoo is facing a shareholder suit and a proxy battle at the same time is not unusual.

"Litigation in conjunction with a proxy battle is like thunder accompanied by lightning," he said. "It's perfectly predictable and rational that the insurgents use litigation as a tool in the proxy battle and vice versa. ... This is a kind of situation where the activities on all sides are following a fairly predictable pattern. That doesn't mean I can predict how it's going to turn out."