A judge has ruled that Craig Newmark and Jim Buckmaster breached their fiduciary duties when they enacted a poison pill at Craigslist that diluted eBay’s stake in the company from 28% to just under 25%.
Jim and Craig made this move after eBay pissed them off by launching Kijiji, a free classifieds service that competed with Craigslist.
The effect of the poison pill wasn’t just financial–it eliminated eBay’s right to appoint a member of the board of directors.
According to Scott Morrison of Dow Jones, eBay still won’t be able to appoint a director even after its stake is restored, thanks to a staggered election provision that remains in place.
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