No wonder Yahoo didn’t want this little tidbit coming unsealed in a lawsuit against Yahoo by the city of Detroit and its policemen & firefighters.
A fiduciary duty is the highest standard of care at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom he owes the duty (the “principal”): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. The fiduciary relationship is highlighted by good faith, loyalty, and trust, and the word itself originally comes from the Latin fides, meaning faith, and fiducia.
— Wikipedia’s entry on fiduciary duty“The (Yahoo) Board made no effort to protect Yahoo shareholders from the known threat that (CEO Jerry) Yang’s deep hostility toward Microsoft would undermine good faith negotiations with Microsoft and prevent an unbiased review of the offer and selection of any responses. To the contrary, the Board handed to Yang responsibility for direct negotiations with Microsoft.”
— unsealed complaint filed in Delaware’s Court of Chancery against Yahoo by City of Detroit interested parties.
Barron’s revealed the unsealing of the complaint in Delaware, with the dynamite assertion that Yang, co-founder David Filo, and the Yahoo board actively worked against their fiduciary responsibilities. Then there’s this item:
One other tidbit from the complaint: The plaintiffs assert that in January 2007 Microsoft offered to buy Yahoo for $40 a share, but that the proposal was rejected in a letter from then-CEO Terry Semel, who instead proposed “a commercial partnership arrangement.”
Delaware Court of Chancery Judge William Chandler said in a terse three-page letter cited in Barron’s that Yahoo’s unwillingness to see excerpts of emails regarding its compensation changes should have been resolved by Yahoo publicly releasing the documents in question, in full.
A Yahoo spokesperson cited in the report expressed disappointment in the court’s decision. We’re certain Carl Icahn, prepping a run at unseating Yahoo’s board, did not share that disappointment; now he only needs to convince Microsoft’s Steve Ballmer to come back to negotiating with Yahoo.
