Class Consciousness and Corporate Law (RE: Union Card Checks: Conservative Analysis of Tactic

jmage at panix.com jmage at panix.com
Wed Nov 24 10:49:22 PST 1999


John J.Sweeney on Monday issued a statement saying the AFL-CIO's "Office of Investment" was contacting fund managers of US trades union's retirement funds to oppose Vodafone in the Vodafone hostile takeover bid for Mannesmann. The statement said that these funds hold 13% of Mannesmann.

This is a change. In the US period of hostile takeover bids (before the '86 - '87 events; i.e. indictment of Boesky & destruction of Drexel), attempts to get US unions to play through pressuring the fund managers (by, among others, my old comrade then semi-leftie risk arb Roger Alcaly, who was well trounced this summer on LBO-list for his NYRofBooks piece blowjobbing Greenspan) got nowhere.

This Vodafone statement looks like it got a thorough going-over by lawyers for the fiduciary duty stuff Nathan is learning about. Having litigated fiduciary duty more than a bit, as you will find out, Nathan, discretion will trump fiduciary duty 9 times out of 10.

Also tried & got shot down with the extortion/RICO bit when fiduciary duty got nowhere in greenmail cases (check out Viacom v. Icahn, 2d Cir 1991 - don't have full cite here) & my old tax prof Joe Sneed - sitting by designation - asked if we were intending to outlaw capitalism! On behalf of Viacom! (that's precisely how I saw it of course, but not what we told Viacom's in-house counsel).

US Courts have a most excellent nose for the class interests of the US ruling class, and attempts affirmatively to use the courts to challenge those interests head-on are a dumb waste of time. Tom ("how many lawyers can fit on the head of a pin") is surely correct. But lefty lawyers have in the past had an interesting role in these inter-ruling class conflicts (like Vodafone) - Nathan, put our predecessor Abe Pomerantz' name into Westlaw & check out his career - & it's good to see the "Office of Investment" trying to be a player in Vodafone.

john mage



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