Friday, November 2, 2007
The dispute between Affiliated Computer Services Chair Darwin Deason (who also owns 42% of the stock) and the company's (now former) independent directors turned ugly, as Deason, on behalf of ACS, demanded the directors' resignations in an angry letter, and the directors, in turn, announced their resignations in an equally angry letter. The dispute stems from a LBO proposed by Deason, along with Cerberus Capital Management, which the directors did not accept, but instead (pursuant to its Revlon duties) pursued alternatives. Last week the LBO was withdrawn because of the credit crunch, and Deason, and some big shareholders, are blaming the directors for the delay. Yesterday the directors brought suit in Delaware seeking a declaratory judgment that they had not violated their fiduciary duties. Meanwhile, there's an ongoing investigation into backdating stock options that resulted in the CEO and CFO leaving the company. There are also allegations of conflicted law firms. WSJ, A Failed Deal At ACS Sets Off A Board Brawl; NYTimes, A Bitter Rift When a Boss Is the Buyer.