Aahh...iNEXTV (AXC) The NEXT Thing! Message Board

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Technology Stocks : Aahh...iNEXTV (AXC) The NEXT Thing!

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To: WAI who wrote (3830)	5/31/2001 7:54:25 PM
From: Fundamentls	Read Replies (1) of 4169

Generally speaking, on an ethical level can a management buy-out ever be justified? ... Does the SEC have any guidelines about this? This issue is governed by the corporate law of the state of incorporation (Delaware, in Ampex's case) and by the company's incorporation documents and by-laws. The SEC isn't involved except to require full disclosure. Details of what's required and permissible vary from state to state and I haven't looked at it closely in a while, but the general rule is that majority shareholders can't screw minority shareholders with impunity; they have to give at least the appearance of fairness (one that will hold up in court). Normally the directors want to protect themselves from lawsuits in any case, so they try to get an impartial opinion, usually from an investment banking advisor (yeah right, like they're really impartial!). There are other protections that vary by state and corporate by-laws, including in some cases voting rights for minority shareholders. To get a definitive answer you'd need a securities lawyer who knows Delaware law, and copies of Ampex's certificate of incorporation and by-laws. Regards, Fund

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