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Relying Upon Fiduciary Duties of Dell Directors to Respect Investor
Rights
As indicated in a note the morning after receiving Dell’s June 4th
letter, the company’s management has switched back from its
recognition of investor information requirements
to its earlier use of legal arguments to obstruct stockholder demands
for records. My response, the text of which is copied
below, leaves it up the company’s board to perform its fiduciary
duties concerning management compliance with laws and respect of
investor rights.
For those of you who did not review the company’s latest legal
arguments when the link was provided earlier, this is the Dell legal
officer’s letter:
The decision to rely upon the company’s board members to perform their
fiduciary duties was based partly on the practical consideration that
it is now too late to seek court enforcement of the demands, since the
company issued its official proxy statement a week ago with a July 18
date for the special meeting. It is unlikely that a court order could
be obtained quickly enough to produce any information in time for
making decisions about voting or appraisal rights. Under the
circumstances, it is more important for Forum participants, including
me, to focus our attention on making effective use of the information
that is available to evaluate alternatives, and also on developing
support for the election of appraisal rights to make that
theoretically ideal alternative more conveniently accessible.
Your questions and comments will be welcomed.
GL – June 7, 2013
Gary Lutin
Chairman, The Shareholder Forum
575 Madison Avenue, New York, New York 10022
Tel: 212-605-0335
Email:
gl@shareholderforum.com
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For a printable version of this letter, with its
referenced copy of a June 4, 2013 letter, click
here.
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[Shareholder Forum letterhead]
June 7, 2013
Mr. Alex J. Mandl
Presiding Director and Chairman of the Special Committee, Board
of Directors
Dell Inc.
One Dell Way
Round Rock, Texas 78682
Dear Mr. Mandl:
As you will see in the accompanying copy of a June 4 letter,
Dell’s management has reverted to disputing its obligation to
provide information needed by the company’s investors.
I do not wish to engage in frivolous squabbling. This requires
your attention, not mine, to decide how the board should satisfy
its fiduciary duties concerning these responsibilities:
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Company compliance with laws
– It is assumed you will seek your own legal advice about the
company’s position that someone who is authorized to make a
statement on behalf of a stockholder cannot present the
statement on his firm’s letterhead. I look forward to learning
whether your committee will condone or correct this.
-
Respect of stockholder rights to ask questions
– Observing your committee’s exceptional efforts to present
investors with information supporting your recommendation, and
your stated plans to conduct private meetings to win investor
support, it is evident that you understand the need to satisfy
investor information requirements beyond what the SEC
specifies for standardized disclosure reports. I will welcome
your development of company practices to fairly provide all
investors with the information they request, just as
effectively as you provide the information you want them to
have.
Please understand that I initiated my communications with you in
February believing that your committee and the company’s
management would welcome collaborative support of a shared
interest in investor access to decision-making information. Be
assured that I remain available to discuss this constructive
purpose.
Sincerely yours,
/S/
Gary Lutin,
as Delegate
cc: William D. Regner, Esquire
Ms. Janet B. Wright |
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