Last Updated Dec 7, 2009 8:04 AM EST
Privately-held Craigslist reduced eBay's ownership from over 28 percent to under 25 percent, which drops below the threshold that would give eBay a seat on the board, which, reportedly, currently consists only of Newmark and Craigslist CEO James Buckmaster:
"[Craigslist] engaged in a series of clandestine transactions designed to ensure that eBay would not be able to elect a director, and to either impose new transfer restrictions on eBay or dilute its interests, and to dilute the interests of the employee holders of company stock options," the [eBay] complaint says.Craigslist is firing back that its actions were only to bolster its protection against hostile takeovers.
According to the Delaware Corporate and Litigation Blog, some of the issues involved include "corporate law and corporate litigation arising, among other things, from board membership on, and investments by, one competitor in another competitor, and the imbroglio that develops from those facts."
The Delaware Chancery Court has been ruling on aspects of this case since at least September including, apparently, an order compelling eBay to cough up complete and unredacted versions of all board minutes from 2004 through September 2008. The suit was first filed in April 2008. I'll have something later today or tomorrow morning about testimony highlights.
Gavel image via Flickr user Thomas Roche, CC 2.0.