Almost every public dispute between a company and its shareholders stems from a core belief that one or more of the company’s constituents is not acting in the best interest of the shareholder or the company. Whether it is an activist arguing that management and the board are entrenched and only interested in lining their pockets, management’s contention that an activist has only purchased the stock to make a quick buck and doesn’t understand the company’s business, or a short seller seeking to drive down the price of a stock, the core of a successful argument relies on facts.
Since the 1980s, when Jules Kroll pioneered the use of investigations as an effective means of combatting corporate raiders, K2 Intelligence’s senior staff has been refining and innovating these techniques, even as the playing field for corporate activism has changed. The corporate raiders of the 1980s have now been replaced by activists who believe they can increase shareholder value through their involvement with a company, and more and more are garnering the support of regulators.
Despite these changes and regardless of whether one is defending or challenging a company, objective facts form the basis of a successful argument. With more than a combined century of experience among the leaders of this practice, the K2 Intelligence team hails from diverse backgrounds and has worked with both activists and corporations to develop information that is used to:
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Inform management, legal counsel, board committees, or the dissidents themselves
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Call into question claims made by the other side or add credence to an argument being tendered
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Support the legal or operational strategy being used
Information developed by K2 Intelligence’s team of investigators is often used to answer a series of strategic questions about the other side. For example, understanding how an activist has behaved in the past may inform management’s decision to engage the dissident or to fight. Similarly, understanding how a company has reacted to pressure in the past or analyzing the actions of the current board may influence the direction an activist takes while engaging directors.
As both corporate activism and access to information has increased, both activists and corporations have gotten more creative in their strategies and tactics. Accurate, comprehensive, and timely information plays a more crucial role than ever. Although K2 Intelligence customizes every investigation to meet client needs, in this milieu we are often asked to do one or more of the following:
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Investigate the background of sitting or proposed directors to identify material misstatements, omissions, or undisclosed business relationships that would raise issues regarding their suitability to serve as a steward of the company.
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Analyze relationships among a slate of directors that would call into question their independence from each other, if not the company itself.
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Assess the veracity of claims made by either side in a dispute and developing information that supports a timely response.
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Provide strategic alternatives for either side to successfully end the dispute.
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Deliver findings in a way that is customized for their intended use (i.e., legal or regulatory filings, digital or print media, fight letters).
