Art Market Monitor

Global Coverage ~ Unique Analysis

  • AMMpro
  • AMM Fantasy Collecting Game
  • Podcast
  • Contact Us

Sotheby’s Poison Pill Has Day in Court; Key Ruling in Corporate Governance May Result

April 29, 2014 by Marion Maneker

BID 3mo after Cap Alloc Plan Announced

Today marks three months since Sotheby’s CFO Patrick McClymont announced a new capital allocation plan. Since that time, the stock has deflated by more than 16% even as the May 6th shareholders’ meeting approaches and proxy fight over three board seats.

Also today a judge hears arguments around Sotheby’s use of a poison pill to limit activist but not passive investors. The issue is likely to generate interest far beyond the parochial fight for control of the auction house.

Delaware Chancery Court Vice Chancellor Donald Parsons will hear arguments from both sides on whether Sotheby’s shareholder rights plan, which allows passive investors to buy as much as 20 percent in the company but caps active investors at 10 percent, is legal. A ruling is expected later in the week, ahead of Sotheby’s annual meeting scheduled for May 6.

The case could have wide implications for activist investing and corporate governance because it marks the first time that a judge will rule after an activist investor who has faced a poison pill has aired his grievances in court.

“The reason this is so important is that the idea that a pill can be used to stop an activist investor has never been approved,” said Robert Jackson, a law professor at Columbia University. “Whichever way the court rules will have lasting implications for the corporate landscape.”

Loeb to argue against Sotheby’s poison pill on Tuesday (Reuters)

More from Art Market Monitor

  • Gleadell: VIP Likely to Change Art FairsGleadell: VIP Likely to Change Art Fairs
  • Kanye & Jay-Z Run This Town, MoMA EditionKanye & Jay-Z Run This Town, MoMA Edition
  • Hungary Ducks Restitution ClaimHungary Ducks Restitution Claim
  • Interpol Goes Public on Stolen ArtInterpol Goes Public on Stolen Art
  • Global Buyers Now Dictate Price Even as They Follow European TasteGlobal Buyers Now Dictate Price Even as They Follow European Taste
  • Sotheby’s Looks to Set Stingel RecordSotheby’s Looks to Set Stingel Record

Filed Under: General

About Marion Maneker

LiveArt

Want to get Art Market Monitor‘s posts sent to you in our email? Sign up below by clicking on the Subscribe button.

  • About Us/ Contact
  • Podcast
  • AMMpro
  • Newsletter
  • FAQ

twitterfacebooksoundcloud
Privacy Policy
Terms & Conditions
California Privacy Rights
Do Not Sell My Personal Information
Advertise on Art Market Monitor
 

Loading Comments...