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Breakingviews: Activism isn't academic

Wednesday, Aug 14, 2013 - 03:34

Jeffrey Goldfarb and Breakingviews columnists discuss the escalating fight over activist investing between Harvard Law professor Lucian Bebchuk and veteran lawyer Martin Lipton.

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Still ongoing saga of the the barbarians at the -- has taken a new twist that the latest affront comes from the ivory tower off from a billionaire. Where they normally come from. Illusion that chuck Harvard law professor is kind of going after some of the entrenched series of management going after her in particular Martin Lipton. The -- -- lawyer in chief. And he's learned chief technical purple. And management yeah right and -- he tends to take that view and advice people that. You wanna protect companies to -- to a large extent against take care of us against activism protect that managed management because that enables them. To think he's been doing it's a very long very long time -- Forty plus years. And he feels. Clearly believes that you know manages the bullets can think long term invest long term. If that some of protected whereas you have activist channel is hedge funds and so propping up say you must change was changed and even if it doesn't happen directly to them. They can. Gets ged and -- in short term ways rather help -- ultimately that's that's his theory right what. At least in -- so who's ever has found at least in this study the Armenia is partial in the sense -- he's got his own he's -- -- a -- in a way bit. He's done in his studies that activists. A good food -- prices at least both in the showtime which I think everybody recognizes but also in the -- -- -- that -- But what's interesting about this is is it's is sort of public nature of the debate it's it's the tone of it is let's say. Lively and -- somewhat personal and it got. Live right in Marty Lipton speaking through his memos to clients he's not just is not legal stuff and and it is legal stuff but the tone is very much -- -- taken on the tone of -- of one of the individual plates that often happens where you have -- and activist shareholder going had a company but ballots kind of it's got to go working teams but by it. Wrote that if that there was a lot of soft stuff there's also weather and sometimes exodus to successfully get people -- companies change. Other times -- all and then that -- that this kind of middle ground when it activist actually has some good ideas about you know. Management or strategy the company might mean to improve the managers say that and Canada -- that's terrible idea -- -- next -- -- some of it. Today's business even a sense in which I I feel like militant arguments and shifted a little bit too much broader picture anyway so optimism in general including activism. Is bad for the economy as a whole that's really up to prevent serious you've kind of looked. Some of. Looked instructs you read about in the past I think there is it a case where. Kind of that times have changed and he's kind of stuck primarily I -- have thought I mean he's been doing this. I don't know Richard. Decade says he has totally been raised the granddaddy of the poison -- he's been you don't represent he's been in these fights for you know since since the get go back in the eighties and before that. And that truck has been very effective I mean what is is approaching run this clinic at Harvard Law School one of Clinton's criticisms is like. Why having an ideological fight. Using you know a law school and and students but he's been very -- the focus on. It comes to focus on particular issues like staggered boards and he's gotten represented investors -- clinic has reps and investors who have gotten changes. From staggered boards. To you know uniform Portland something like seventy companies over the past six months it's kind of -- -- start -- pressure we -- gonna leave -- -- -- -- -- that -- -- Again soon for more breaking news.

Breakingviews: Activism isn't academic

Wednesday, Aug 14, 2013 - 03:34

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