Today, I want to mention just one private suit. Just one, a suit filed last week on behalf of all shareholders, in Delaware Chancery Court. The nominal plaintiff is the Orlando (Florida) police force's pension fund. The claim is that Musk, and the current Twitter board violated the certificate of incorporation in Delaware -- in the way they've structured the now-agreed deal. And that effectively gave Musk and the financiers extra-dollar denominated value -- value that is owed to the non-Musk group Twitter shareholders, who bought relying on the "shark repellant" provisions in the Twitter charter, to help them avoid a too-low coercive offer (like Musk's).
I actually think this may be a winner -- or at least, worth pretty high settlement value. We shall see.
The complaint correctly points out that in Twitter's Delaware charter, a vote of shareholders is required to end its classified board structure (which in turn mandates complete board turnover cannot happen in any less than three annual election cycles -- one third each year).
Simple, you might say. "Just vote to repeal, once Musk has 50%."
Well. . . the charter also provides that a vote to repeal the classified board must be by a two-thirds majority vote. At present, it looks to me as though Musk's financiers' math expects to get only 50%, then permanently waive the pill, then replace the board.
But the pension managers correctly point out that this likely reduces the value they will receive in any transaction, since the board putatively waived a "no waiver" provision of the Delaware charter, at the $54.20 price offered by Musk, a few weeks ago.
And so, a higher price may be needed, to get over the two thirds hurdle. We shall see.
Onward, for a sunshine dappled bike ride, by the lake. . . smile.
नमस्ते
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