In his Business Law Professor Blog today, Dale Oesterle questions the inherent fairness to the public shareholders of a going private deal engineered by management and investment bankers for the corporation (a "MBO"). The professor notes "As executives of a publicly traded company the executives and their advisor had a fiduciary duty to the company to maximize its value for its public shareholders. Now they are buyers and maximizing value for themselves. These MBOs have an inherent off-color odor."
He points out troubling aspects of these deals. " The question in such deals is always the same. Why did the executives not do for the public company what they now propose to do for the company when they are the owners? Are the executives taking personally a corporate opportunity that they discovered as fiduciaries? [And in this case are their advisers also taking advantage of their inside information.] Have the executives of a publicly traded company "dogged it" to set up the buyout opportunity?"
A very interesting perspective.