Yahoo says it is facing seven shareholder class-action suits and many distractions in the wake of rejecting Microsoft's $44.6 billion bid.
Yahoo said that Microsoft's $44.6 billion bid
to acquire it has spawned seven class-action lawsuits from shareholders claiming the Internet company breached fiduciary duty by rejecting the offer
The company also acknowledged in its annual report to the Securities and Exchange Commission Feb. 27 that Microsoft's bid has created a distraction for Yahoo's management and has introduced uncertainty that could hurt the Internet company's beleaguered business.
Yahoo said four separate shareholder lawsuits have been filed in the California Superior Court against Yahoo, members of the board of directors and some former officers by plaintiffs Edward Fritsche, the Thomas Stone Trust, Tom Turberg and the Congregation Beth Aaron.
Even though Yahoo roundly rejected Microsoft's offer Feb. 11, plaintiffs in two of the California lawsuits allege that Microsoft's Feb. 1 unsolicited proposal to buy Yahoo is inadequate and that the Yahoo's board breached fiduciary duties by considering Microsoft's unsolicited proposal.
The plaintiffs in the other two California lawsuits claim that Yahoo breached fiduciary duties by failing to negotiate a transaction with Microsoft or other potential bidders in the past and presently.
The complaints in the California suits seek declaratory and injunctive relief, and request Yahoo be made to pay the plaintiffs' attorneys fees and costs.
Like the California suits, three suits filed in Delaware court allege breach of financial duty but for slightly different reasons.
Wayne County Employees' Retirement System, Ronald Dicke, and The Police and Fire Retirement System of the City of Detroit along with The General Retirement System of the City of Detroit
allege Yahoo breached fiduciary duty by rejecting Microsoft's offer without fully informing themselves of whether Microsoft would offer additional consideration.
One of the Delaware lawsuits alleges that the board has pursued various blocking transactions, adopted an employee severance plan, and a shareholder rights plan in violation of fiduciary duties.