Who Bleeds When the Wolves Bite?: a Flesh-And-Blood Perspective on Hedge Fund Activism and Our Strange Corporate Governance System
LEO E. STRINE, JR. Who Bleeds When the Wolves Bite?: A Flesh-and-Blood Perspective on Hedge Fund Activism and Our Strange Corporate Governance System A U T H 0 R. Chief Justice, Delaware Supreme Court; Adjunct Professor of Law, University of Pennsylvania Law School; Austin Wakeman Scott Lecturer in Law, Harvard Law School; Senior Fellow, Harvard Program on Corporate Governance; and Henry Crown Fellow, Aspen Institute. The author is grateful to Christine Balaguer, Yulia Buyanin, Peter Fritz, Alexandra Joyce, Fay Krewer, and Peggy Pfeiffer for their help. The author also thanks Bill Anderson, David Berger, Jim Cheek, Joele Frank, Ron Gilson, Andy Green, Jim Griffin, David Katz, Rob Kindler, Lou Kling, Don Langevoort, Travis Laster, Marty Lipton, Ted Mirvis, Bob Mundheim, Sabastian Niles, Eileen Nugent, Miguel Padro, Frank Partnoy, Roberta Romano, Bill Savitt, Brian Schorr, Randall Thomas, Antonio Weiss, and Josh Zoffer for the excellent feedback and incisive com- ments on the draft. 1870 WHO BLEEDS WHEN THE WOLVES BITE? Few topics are sexier among commentators on corporate governance now than whether activist hedge funds are good for, a danger to, or of no real con- sequence to public corporations and the people who depend upon them. As befits tradition in this space, catchy pejoratives caught on, and the phenome- non of concerted action by hedge funds and other more traditional money managers, such as actively traded mutual funds who often encourage and sup- port the investment strategy of the alpha wolf, to influence public companies' business plans has been deemed "wolf pack activism." For a term so evocative of dangers to the flesh, the debates over wolf packs, and more generally the topic of hedge fund activism, have a surprisingly blood- less quality-one that uses abstraction and distancing to obscure what may be really at stake.
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