Clark Resigns from Lazard Board

Robert C. Clark resigned from the board of Lazard Ltd. yesterday.  He also sits on the board of Time Warner Inc. and Carl Icahn had hired Lazard to plan a proxy contest for a majority of the seats on the Time Warner board.  A Lazard spokesman, Rich Silverman said that "while there was not and is not any conflict" between the two board positions, they wished Clark well.  Clark himself said that he hope to "eliminate the appearance of a conflict of interest..."  Of course there was a conflict and not just an "appearance of conflict" -- an actual, real conflict.  Clark was on both sides of a proxy contest and a potential deal (settling the contest).  At issue is whether Clark is now an independent director on the Time Warner board.  If not he should refrain from participating in the proxy contest discussions on behalf of Time Warner or, if he cannot, he should also resign from the Time Warner board.  Lazard signed with Icahn to fight the management of Time Warner while Clark was on both boards and there was an actual conflict at that time.  At the time of the signing of the Icahn agreement, Clark had an actual conflict. He had (in theory) access to confidential information on both sides (Icahn & time Warner).  Moreover, at the time of the signing there was a question of whether Lazard would advise Icahn that Clark be unseated in the proxy contest.  This gave him a personal stake on both sides in the contest, his board positions (paying $175,000 a year from Time Warner and $100,000 from Lazard).  Adding to the mix is that Clark has a professional relationship with Wasserstein, the leader of Lazard.  Now that Clark has resigned from Lazard, is the conflict cured?  Lazard must still advise Icahn on whether to keep or attempt to unseat Clark.  And Clark must respond to Lazard's challenge (or olive branch as the case may be), at the board level, in the best interest of the Time Warner shareholders.  The conflict appears to remain or, at minimum "appear" to remain.  The situation points to a a disconnect between the public perception of a conflict and the technical parsing of conflicts by lawyers.  In such situations, the public usually has the correct position.