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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: DownSouth who wrote (28823)7/25/2000 10:12:34 PM
From: Lynn Goodman  Read Replies (1) of 54805
 
DS and Mike, what I am theorizing is that at the beginning, when Spinco is set up, Q can have any sort of relationship it wants with it. After all, prior to that time it is a unit of Q and there is no obligation of arms length or fair trade dealings at all. It could be that these issues kick in only after Spinco is truly independent.
There's also an old legal maxim that pops up occasionally saying that you can't do my indirection what you couldn't have done by direction. It pops up in my mind in this context as well, with the same analysis--maybe certain actions that are okay before the spinoff will not be permitted after, except what is already in place.
Again, I assume that counsel for Q, Goldman and Lehman took a look at whatever the legal issues are. I am simply having another midlife (as opposed to senior) moment, where I remember something, seems like I'm on track, etc., just can't quite pin it down.
Regards, Lynn
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