Excerpts: “Market Place.”

  • In a recent article in the New York University Law Review, Arthur M. Borden argued that going‐private transactions are not only legal but also desirable—in certain circumstances.
  • Mr. Borden, a member of the New York bar and adjunct associate professor of law of the New York Law School, believes, however, that there should be safeguards to protect the interests of the minority shareholders.
  • He wrote that he thinks that since fairness of price is at “the nub” of the matter, the person who sets the price —acting as he must as a fiduciary—should have “some obligation to get the best price.”
  • Commonly those attempting the buy‐out—usually a management group with enough stock to control corporations—seek help in Wall Street. Mr. Borden agreed with many critics of the system that “employment of investment bankers to solicit other offers is an invitation to a game which is not likely to accomplish much for anyone.”
  • Mr. Borden did not comment on a related complaint: That the use of investment bankers to set the price in the first place also lends itself to abuse, since management pays for these services.

Source: New York Times