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The Hedge Fund Activists Are Not the Flavor of the Month for the Chief Justice of the Delaware Court

Forbes – Some very high powered judicial figures and institutional investor giants are coming down hard on insatiable promotional shareholder hedge fund activists like Bill Ackman, Daniel Loeb or Carl Icahn for self-interested activities that are distracting boards of directors on matters of short term influence on stock prices. It is a sign that some establishment powers-that-be believe the pressure for common stocks to perform in order to raise hedge fund returns may not necessarily be in the public interest of the long term benefits of finance capitalism.

I call it an extraordinary intervention into the debate when the Chief Justice in the state of Delaware Court, where many hard-fought battles take place, Mr. Leo Strine, published in the Columbia Law Review a long tongue-in-cheek attack on the advocates of short-term share maximization. Mr. Martin Lipton, the senior partner of law firm Wachtell Lipton, could not have found a better placed ally even if he had seconded the Chief Justice of the U.S. Supreme Court to his side. Strine has ridden to the rescue of Lipton in his fairly emotional debate with his bete noir, Harvard law professor Lucian Bebchuk. Strine charges Bebchuk with wanting all power to the money managers rather than the corporate managers.

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