Sotheby’s Will Cover Dan Loeb’s Legal Expenses to the Tune of $20 Million
Dan Loeb may have been critical of Sotheby’s business practices, but he isn’t above letting the auction house foot the bill for legal expenses incurred by his hedge fund Third Point Capital during the recently resolved case between the two companies.
During Sotheby’s annual meeting, the auction house revealed that it spent about $15 million on the proxy battle, which became quite barbed (see artnet News’s report) over the course of the nearly year-long dispute. That includes some $5.7 million in “third party advisory, legal, and other professional service fees directly associated with issues related to shareholder activism and the resulting proxy contest with Third Point LLC,” according to documents distributed at the meeting. Sotheby’s also expects to incur a projected $10 million “for the reimbursement by Sotheby’s of Third Point’s out-of-pocket, documented expenses in connection with the support agreement entered into on May 4, 2014.”
Activist investor Loeb was fighting for three seats on the Sotheby’s board, which has been expanded to include his proposed members as well as the slate backed by the auction house. Loeb was also contesting a “poison pill” provision that Sotheby’s called a “shareholder’s rights plan,” which capped his shares at 10 percent. Under the agreement, Third Point can own up to five percent more of the company.
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