Transcript
Welcome to shareholder Primacy from freefloat media, podcast about activist investing Securities Law, and all the ways, the financial and legal rules intersect and Collide in real life. I'm here with and lived in a law professor at Tulane in New Orleans who teaches and research is Securities and business law. She of course, holds up the legal end of our podcast and that's Mike Levin and activist investor who lives and works in Chicago. He covers the financial side of our podcast. Yes, thank you. We have some interesting things we can talk about related to climate change, disclosure rules that are that the SCC isn't in charge of and kind of what is happening there. So we can do a really fun Deep dive on to that. Yeah, we should also look at this interesting activist attack at Pfizer yes, Pfizer and starboard value will handle that, a little later. But let's first talk about the climate change. Rules are disclosure rules, I will confess, I have not followed that too closely. I imagine there's a bunch of other listeners that have varying degrees of familiar. Already with that. So we may have to start from the beginning. So an, what are these rules involved? Okay, so taking the giant step back. As you know, the SEC requires that publicly traded companies make regular disclosures about their business and those things. Okay, 8K. Yeah, exactly. Annual importantly, it's not proxy stuff, lots of just go, that's the whole, that's the centerpiece of between registration and disclosure. That's, that's how we regulate companies, right? That's one way we do it. And, and these disclosures they include balance sheets and come statements. All that kind of hard financial data but also more qualitative information, like risks the company faces trends that might impact operations. So back in 2010, people were agitating for more information on how climate change was affecting businesses and the SEC, it didn't change any of its rules, but it did put out this guidance and the Guidance was there to remind companies that the pre-existing requirements, the company disclosed risks and Trends could include factors pertaining to climate change and so they should consider whether climate change is presenting risks and trends, that should be disclosed alongside their other risks. Fast forward to 2022. The SEC concluded that this 2010 guidance wasn't good enough. The information being generated wasn't particularly detailed. It wasn't comparable across companies. So now the SEC proposed specific rules. Requiring, the companies disclose, how climate change is impacting operations, there was an absolute tsunami of commentary and the SEC issued final rules earlier this year. And I'll briefly just summarize. What those? Let me stop for a second. Make sure. Yeah, at least I understand and everyone else. So, originally the idea of disclosing disclosing stuff information about a company is climate policy. Climate disclosures, whatever was considered, kind of part of very generalized disclosure exactly. It was part of this generalized loose disclosed that and then there were you said people. There were very as parties that found that unsatisfactory who were parties, some of them would be investors. Some of them would be more activists who You know, are advocates, for social responsibility, investors, who are both that, you know, that kind of mix, got it. So they found that Kind of disclosure unsatisfactory. So that pressure and the essay. Yeah include straight up Financial investors like a mix you know all the all the all the players, right? And so they pressured the SEC to be more specific. Exactly and they've been doing, I mean for a while. And obviously in the Biden Administration for, for the Biden Administration, climate change was a big thing. So the SEC began to seriously, focus on developing more specific rules and that was around 19 2022. That was 2022 was when they proposed them. The final one came out early this year and so what happened? So well, these rules, this is what they require the final rules. I'm just summarizing companies have annually, disclose their losses, and expenditures caused by severe weather events. They have to disclose whether the assumptions used in formulating, their financial statements account. For severe, weather events, they have to describe climate risks that are likely to materially impact operations, and they have to have a host of related information. Like mitigating steps transition. And how business strategy is impacted. They have to describe how the board and management oversee climate risks. And that includes they have to disclose if they're a board committees that consider climate risk, which management Personnel is involved. What their expertise is that kind of thing, they have to explain their processes for identifying climate, risks, and managing them. And then for larger companies, only larger companies they have to disclose certain greenhouse gas emissions. But only, if that information is deemed material to investors and there are rules about Assurance, making sure the numbers are truthful. So, that's two halves first, is how climate risks, generally written affect the company and then for certain other large filers, How they're dealing, how they're affecting the climate I guess, well sort of their ghd admission. So, exactly this part of that rule is very controversial because it reads much more. Like we're trying to control your effect on the world. The justification is essentially that these companies may be exposed to transition risk, meaning that if they're in jurisdictions, that have new regulations that require they reduce GHA emissions, then that's going to affect them. But they only have to disclose that if that's material. So that's the general idea. And these rules drew a bunch of challenges. You can petition and appeals court to vacate new regulations. So that's exactly what happened. There were nine different cases filed. Wow, all of the petitions were Consolidated into one big case. That's now pending in the 8th circuit. So the 8th circuit will hear this Challenge and decide whether the rules can go into effect and this is the whole list every this whole set of rules is now being checked and who challenged it. Probably. Okay, the business round tables. Yes. Everybody's So the challengers include several nonprofits and trade associations like the business like the US chamber, the Texas alliance of energy producers the national Center for Public Policy. Research. Plus 25 states are challenging The Usual Suspects, red States, Louisiana Texas, Iowa Missouri, West Virginia. On the other side, then defending the rule is the SEC obviously. But 18 states, plus the District of Columbia intervened to also defend the rules. So their defending it and those are just the parties. Then there are the amicus briefs. There are a zillion Amicus priests from other groups, including the Business Roundtable, like can't even count. The number of Business Roundtable, bunch of nonprofits and trade associations academics. Former SEC officials current members of Congress and three dozens of these to read. They are so many three and they're very repetitive. It's at least they don't all get, they don't say different things. They were let you do the reading and tell us about That's three additional States who also weighed in is amicus and said of intervening formerly, which means, by the way, that there are exactly four states that have not taken a position, which I have to ask Maine, New Jersey, North Carolina and Pennsylvania. Those are the only states that have not waited. We're just not, we're not, we got better things to do, they? Yes, everybody else is taking one side of the other. So I'm sure in the past there have been other cases that have drawn this much briefing, but not that many of them. Okay, fine. So and this isn't a circle in the 8th circuit. Yes. Where's that again? Don't make me okay, nevermind off the top of my head, I'll get it wrong. Okay, so but it's in federal district court, right? No a pellet cord. It's a really good oh so it's already been kicked up to an app. Yeah because these challenges are filed directly in the Appellate Court. Oh that was my question is yeah. What level? So the next move after this is Supreme Court was exactly anyway great. So what are the so what are they arguing against? I mean, it sounds like I mean, you know, I I mean people generally like disclosure these seems to be that's Us the acquisition but you can, I mean politically we can guess what, the opposition. But the arguments the legal arguments you can break down into two buckets, the substantive and procedural. The substantive arguments are that these rules are wholly. Unlike anything, the SEC has ever done before and therefore, categorically beyond the commission's power. So these arguments include claims like they're not really investor rules their environmental rules their intended, to advance an environmental agenda. The SEC is no expertise to advance an environmental agenda. Congress did not authorize the SEC to become an environmental regular regulator that the rules violate the First Amendment because they're so outside the sec's normal business, that kind of thing. So those are the substantive arguments. These are just sort of categorically different from anything, the FCC is ever required disclosure about the procedural arguments, are that even if the SEC is authorized to adopt rules like this, they didn't do it the right way. They didn't have enough evidence that a rule like, this is needed. They didn't proper evaluate, the cost. The final rule was too different from the proposed rule that kind of thing. So, there were these repeat procedural, which is pretty routine to object. He kind of melt together. Like, you know, there's some argument that, like, the procedures were so bad, that you can only conclude that the SEC wasn't acting within the scope of its Authority. That kind of thing. But it's basically you know either this is just no rules like this. Have ever been permitted under Security's laws or maybe they could be but only in a world where the SEC do more teasing Crosse. Okay. and then, of course, all the substantive ones are Pretty significant which sound like they revolve around? The SEC is not the EPA. Exactly. Exactly. That's said repeatedly. Okay, cool. Now, I have to ask what some, what's your view of the arguments on sort of pro and con here? Okay, well, I mean, we're talking about the substance and you probably have an opinion. Yes. Do you have an opinion about these rules? I do have an affinity about this. Yes, let's hear that. Well, let me talk about the argument. So I think a lot of the challenges, distort with the rules actually do other than the requirement that the ghd admissions been disclosed, which we mentioned, and that's only for larger companies and only, if there are missions are material. These rules are not about getting companies to become more environmentally friendly, or whatever. These are about accounting for the fact that property in Louisiana, Florida. And California is on insurable about the fact that workers are suffering from heat exhaustion because they can't tolerate outdoor climates. About bridges getting stuck because they're warped by heat so you can't ship goods. Can't take off in Arizona because the temperatures are too high. So, All this stuff we're reading about your companies are now. Going going to. Be required to kind of disclosed, the impact of that and come up with the plans. So that's what the vast majority of these rules are aimed at and I find it Ludacris, say this isn't a financial concern or an investment concern. We know there's a huge history right now and climate intelligence sit at El hired, weather forecasters to assistant, it's Commodities training. So the whole purpose of the Securities laws is to make that information public so that individual investors don't have to engage and duplicative efforts to ferret it out. And once you're there, if you recognize that these are not environmental rules, these are really about infrastructure Rifts posed by climate change. It's very hard to say that they're categorically different from any other disclosure requirements. The SEC is adopted in the last 100 years. So basically, in part, this becomes a an argument In the legal sense. Legal argument about materiality that these have been these have become material now and they require disclosure. Okay, go ahead. Yeah, so I mean, just to be clear on this that, you know, some of the arguments are simply that this is. So, like, environmental is so far outside what the SEC normally does, you know, you're supposed to do balance, sheets, and income statements. And the difficulty with that kind of requirement is the SEC has always disclosed things that go beyond balance sheets and income statements. So there are other other analogs exactly. There's okay, exactly. They already have to just go be mentioned risks and trends. That impact operations recently the SEC required companies to disclose the boards role in overseeing cybersecurity Risk, including the Personnel responsible for cybersecurity and their qualifications companies have to disclose their human capital resources and their policies for developing and retaining Personnel. They have to disclose the board's role in overseeing corporate risk. Taking how that affects the board's leadership structure. They have to disclose how their compensation policies Line with their risk management policy and in 2010, the SEC said, existing rules required climate disclosures and no one suggested, it was beyond the sec's authority. So if you can require companies to disclose climate change risks as part of sort of generalized risk, there's no reason why they can't just then say, well, you know what? That's actually not effective because different companies, interpret the role differently, there's no standardization. Therefore, we're going to have a more detailed list of requirements to make sure everyone's looking at this the same way and that's another benefit of having a uniformed security is disclosure system standardization, You can disagree with the policy choice, but it's really hard to see why that should be categorically outside the sec's power, and is someone who reads this stuff all the time. I could there are some companies. In my portfolio or others are research. Where I am probably less interested in their climate impact of climate on their Business. Like, you know, I'm really not that interested in how climates going to affect a publicly traded at agency or somebody like that? There's somewhere it would be a stretch. For that company to try to come up with credible. Reasonably precise estimates. I mean it sure. I'm glad. They're, they're thinking about a little bit, but it's not actually gonna be. There are plenty of other companies where I am wondering. I wonder about the impact of climate events as you said as or is the right says, I think. Yeah, um, on the company, plenty of people in the oil and gas obviously cast business, but there's another end of that, that, you know, that may affect them in other ways, too. But there are, you know, really reach. I don't know, you know, there's tons of companies where climate and so, so just having the opportunity to understand this little bit could be helping me should be helpful right now but at least getting in the habit of disclosing this stuff, okay? And if the company doesn't have any risks to report doesn't have any messages for it. So but a lot of the challengers are claiming that the information is immaterial as you said. And this is like I just want to explain what this argument is because I think it's well funny but it's a technical point but it's important for the security. So let's operate As you say, we assume investors don't care about every single fact. They only care about material facts or important facts, and technically legally. The standard is sort of a fuzzy standard. It's some facts. Likely, to be significant, a reasonable investors, it's pretty, it's a circular definition. Yeah, it's kind of an imprecise standard. So some of these new climate rules, specifically, say you only have to disclose something, if it's material and some of the rules, if you read them, they say, you know, disclose this, if its material and some say disclose it, no matter what. So for example, you have to disclose all losses due to weather events subject to a bright line to minimis exception. As long as it's about the threshold, you have to disclose it. The company doesn't get to decide some whether event losses were a material. If it's above the dollar threshold that has to be this closed and Some Challengers basically essentially climb that this means the SEC is requiring immaterial information and that's proof that these aren't really investor oriented rules but you have to understand how the Securities laws work. So the Security's laws have this long list of items companies have to disclose. And sometimes those rules say only disclose if material and so they don't you just have to disclose it. Boards have to disclose their role in overseeing corporate risk. The rule doesn't say disclose the boards role in overseeing corporate risk. If its material, you just have to disclose it because it's a general, right? It was a materiality qualifier like saying if its material that might protect against burying and investors and trivial information. But when there's a materiality qualifier it's harder for companies to know what their obligations are. It's harder for the SEC to administer the rule and you create these idiosyncrasies and interpretation from company to company. So the SEC and its judgment. Sometimes says, you know what, I think this topic is generally important enough that everybody should disclose and if it turns out, there's not much to disclose fine, no big deal and you say that and you say we've studied this, we have, we found a process, we've hired a consultant, whatever we needed to do. Exactly in our opinion that risk is low and then it'll be up to the auditor the external auditor who looks at controls. To figure out whether that was a sensible, that was exactly. Okay. And that's exactly. So some of these climate change rules have no materiality qualifier and some have them so and but ironically some challenges even take issue with the rules that do have a materiality qualifier. The ones that say you only have to disclose it if it's material because for a company to even make the determination of materiality, they have to examine the issue and that's expensive. And so the challengers object to the rules. When they don't have a materiality qualifier and they object to the rules when they do, have a materiality qualifier just don't like the rules. But the reality is that the language of the climate rules reads, like it was modeled on the other rules, like some of the language is very similar to the cybersecurity rule. It's very similar to the mdna rules about trends that are reasonably likely to impact. So I do think though that there is a theme here and this is the theme to The Rules, the SEC believes that climate change will have a significant financial impact on business. A lot of assets are going to be damaged to supply. Chains are going to be interrupted, companies are going to have to build redundancies into their systems, whatever else and the SEC also believes. I think this is what you get from the rules that companies aren't currently accounting for that. And so those future costs are not being accurately represented so investors and the SEC wants to change that by forcing companies to focus on the issue. So the challengers are right. I think on this point many parts of the rules are not really disclosure rules at all, these are governance rules. So for example, when the SEC says describe how the board and management oversee climate risks, sure the company could say, yeah, actually, no one on our board. and management is paying attention to climate, but they're not going to Say that. So now the company has to create a management team to look at climate risk, when maybe it didn't have one before. So that's really a governance rule but it's Not any different from any other aspects of the Securities laws. Sure. It's like, cybersecurity, just all of the disclosure rules the trend disclosures, the financial disclosures, all require boards to develop corporate processes to collect, and evaluate information. So it can be disclosed and that's always been how the Securities laws operate. You can go back to 33 and read the debate surrounding the Securities laws. Congress is very explicit. That disclosure would have the effect of improving corporate governance. When legislators said yes, the bill is intended to interfere with business. Feel like Frankfurter said, disclosure would force new business habits. So my big worry here, this is my real big concern is that if the 8th circuit or eventually just Supreme Court accepts the argument that there's something categorically different about the climate change rules. Where then, on this slippery, slope it'll reflect back on. It's not because it's not 1930 and we've really come a very long way from acquiring like balance sheets and income statements, we required 1933 so that leaves us with the procedural. Comment the SEC didn't do its homework and all I can say about that is the SEC study that's for years. They processed hundreds of comments and formulated this rule that would ever else. You think of it requires companies to acknowledge the financial risks facing business and exchanging. Climate is there counter evidence. Sure are there reasons to think it's not the bestest rule, the SEC could have come up with sure will a cost companies money to comply. Oh sure. But all of that is true no matter what the SEC does and if the mere fact that there's disagreement and judgment involved, as a reason to strike the rule down, then courts are just now being super Regulators, they aren't leaving that task the agency anymore. They're just taking that power to themselves. And quite frankly, I trust the sdcc more than I trust the 8th circuit. I yes I would, I would guess space on recent jurors. Prudence that This. Trend which we don't have to talk about that toward trying to lessen the impact of. But anyway so it sounds like you're If, if you are on the 8th circuit, you would, what would you, what would you be doing? I think, I know, but I just want to know I'm in favor of the rules. I mean, in a broad sense. I don't really have a position on. Whether these particular rules are the bestest rules or if I was drafting them, I would have written them this way, but my view is the highest purpose of the Securities laws. The Meta reason we have Securities regulation is to ensure efficient Capital allocation. We want to make sure that our resources flow to good profitable productive businesses, and they don't float a businesses that are going to evaporate if Capital flows, say to a tourist town, that's going to be completely destroyed by a hurricane in 10 years. That's more than just a loss of investor money. Everyone who moved to the town and got a job there and bought a home there and raise kids there. When the towns underwater, even if the residents survived, they're going to have to relocate and start their lives over. That's social wasteful. So really I think on a meta level so Securities laws are supposed to prevent that they're supposed to give investors sufficient information so that they don't direct investment to socially. It's a capital, allocation. Exactly. So we don't want investment to go to that town. We wanted to flow to some other Town that's going to still be around. And that's what these rules are about. Making sure that when Capital allocation decisions are made, they're made with a view to which assets are going to survive in, which aren't. But I'll also say, for me, personally we know there's a lot. Are you? Where you live, right? I mean in New Orleans, right? But I hate having to watch for hurricanes every summer, but also there's a lot of political opposition to climate change adaptation measures. We know that there's these Blues political fights, and my own view is that if businesses are forced to truly reckon with what the costs are going to be, then maybe some of that resistance will loosen up and I think that would be a very good thing in terms of, you know, like Spurring the political establishment to move faster without adaptation, right and to and to help in the future assure that the SEC doesn't have to be the EPA. Can, in fact, do its own thing? Yeah, is that is that well, I don't think these are EPA style rules, but yeah, I think that we could see, we could still see that, you know, more measures to shore up, you know, existing infrastructure and so forth. More more reason to make those regulations. If businesses have to sort of reckon with the kind of cost they're facing, Cool. Wow. Well, that was There's a lot to think about and we'll probably return to this. It sounds like the. Yeah, well here, what? They have, one second it happened. We don't know. We don't even have an oral argument schedule. But at some point there's going to be an oral argument. And then, of course, whatever happens. It goes to this. I'm sure it'll get appealed up and we'll see if the yes, the Supreme Court, probably, they may want to take this. No, they will take it, I probably will. That's actually. Okay. Well, you you cleared their, you know what they look at? All right. Let's um, let's pause. There's a lot to think about here. It's pause in return to a quicker discussion of Pfizer and starboard value. And what developed, what interesting things developed their here at shareholder Primacy. This is the free flow media podcast Network, where we cover the, who of the business news? Because investing isn't a, what it's a, who check out our other podcast business pants for fact-based, snart covering companies in Executives and the proxy Countdown. The only podcast that treats company meetings like sporting events, find them on iTunes Spotify or wherever you get your podcasts back to the show. Welcome back to shareholder Primacy. I'm Anne Lipton here with Michael Levin, and now, we're going to talk about starboard's. Activist attack on Pfizer. What is going on there? Well first, at some point we gotta stop talking about activist attacks. I know it's common and I referred to as if you like that. Okay. Great engagements. What was it escalation? Escalation lower the temperature. This is just in this case this was an attack. I will say that if your fiser and you're Albert borla the CEO. You you felt really attacked by what happened in a very unusual way. So let me let me lay out some of the scenario. We can talk about that a little bit that we don't know much. Uh, based on what's been disclosed so far, but it's worth it. We know enough to be able to bring up some very interesting issues and then there's actually a little legal question we can, we can kind of bat around for a minute. So what happened was just recently in about the past week, it was disclosed that starboard value. The very famous Jeff Smith activist fund, that was known for Darden and so forth and did some really great stuff there. Most recently had submitted this, non-binding Cheryl proposal, we just discussed at News, Corp. Same guys, real badass fund. They have about a 1 billion dollar investment in. Pfizer Pfizer, we all know and love responsible for our covid-19 vaccine and many other Miracle drugs. And they have some concerns that are not necessarily been expressed yet. Starboard, has not yet publicly stated any kind of a thesis or a case though. It's really clear. Share price is down. Pfizer took all of its vast profits from selling covid-19 vaccines invested in a bunch of m&a. Some worked out some didn't so it's not quite clear to like the investing public kind of exactly what you know how fast should a handle this and starboard. Evidently has some concerns maybe even objections to how they've been running on the business. So and we'll get to why this is distinctive in a minute. But let me let me cover a couple of the other quick things that we do know. So there's been no SEC filing some Starbursts they're not a 5% file or yet or ever. I don't think its gonna be way too big for them to hit 5%, I think so, all we know is from, you know, news reporting and and from FNL Lee, the way this got to, Pfizer, somebody we think it's Starburst. Inadvertently. Sent an email. To. Pfizer to the CEO to CEO. Borla copying. The former. CFO and CEO the CEO before borla, and also copying someone from starboard. And it was a evidently no one. I haven't seen. It was a blank email. Well, it was a header. But the CEO for his former CEO, this the former people there are still on the board, right? They're still associated with no they're they're they're they're gone, okay? They are, I don't believe in whatever his name is is on the board. CFO was never on the board but they're still, they still own shares and so forth becoming important in a moment and so they were copied on this and CEO. Boris said what is going on? And that's how it became clear. That Starbucks had its shares and was clearly had something cooking. Um the next thing that happened there was a little bit of reporting just news reporting about how the CEO and CFO. In fact, were working with starboard to try to help build their thesis, build their case, which is like gold. You know, I try to, you know, that's something. I think about all the time is it can I get a former executive to help me with an activist situation? You know, where the bodies are buried? It was the basically the person who helped a point borrow, it was job so that it's not surprising that starboard had this relationship with these two. Two folks, okay, there's a little bit of disclosure about how you were working together and then what happened. Next was quite breathtaking. And something of a left turn, which is the two executives. Disavowed any relationship with starboard and said, we are completely. Confidently behind the incumbent board and so they completely 100%. Yes, they changed their tune. They said you know. Yeah. Maybe we talked to starboard. We have like one call but we've done District regard that. Yeah, okay. Okay. And so that was all the news reporting. All right. Their thing that came out was starboard. Wrote a letter. To the board that that it did get disclosed in a news release a couple days ago. And that letter said we were in touch with these two executives. as part of our normal due diligence, which is totally reasonable and, and totally expected starboard said we engaged them enough where they became interested in supporting us, We understand now, since this off kind of came out, this blanking email thing that they were threatened. With litigation with loss of their Severance agreements, with loss, of shares and investing in Australia, anything that was in their their golden bearish. Basically, it was going to get taken away. And we urge the board to investigate this. And to sort of see what happened. Okay. So that's that's kind of where it stands is. That the deal kind of blew up a little bit. Now it's, it's because it's starboard. It's hard to believe that this kind of thing is going to compel starboard, like, John walk away right there, their case, their thesis, their investment depends on more than just having these two Executives but this can't help this probably hurts, right? Yeah, okay. And I've mentioned just the embarrassment of this which is yeah it's like it's it's really silly for that. So so that's kind of where it is. It's in my guess, is the likely kind of continue it? It's not. There's supposed to have a meeting this coming week. Again, of course, this podcast will be aired a little later, but as so, by the time it airs will probably know what kind of meeting they had, but just supposed to be a meeting happening between Starburst and a couple in a board member and CEO borla that's upcoming. So that'll probably, you know, Hopefully lead to something productive for these folks because there's hopefully something productive to be had here. But other than that like I said, there's not much known but there's a couple of distinctive aspects to this that are worth bringing out. The first is just how screwed up it was for this to happen the way it did and for two Executives to be on board and then turn around. Another interesting attribute of this was how it was you know, this isn't some really horribly failing company, share price is down and so forth but generally a well-governed well-regarded company and and it's it's similar I suppose a little bit to like Disney or some of the others we've seen where you have a really generally sound, you know, company with great products and so And, and we're looking for kind of incremental, or a much more subtle changes. There's not that really an obvious, kind of a set arguments about what to do to turn around this year. Price, you know, starboard clearly has its view. But doesn't necessarily hasn't just closed it yet. Hasn't made any public about what they think should be done and I that would be one of the next things. I know why I'd want to see. But there's another interesting Dimension to this that we should just take a moment to consider which is the demands of the board from starboard to like investigate this. Now it's not clear who threatened the two Executives, whether that was at the board level or whether that was borla himself or some sort of Boris on the board though. It's definitely direct. So that was even doing it at the board, little Shore. Yeah yeah and he and he may have Not disclosed this to the board. I don't you know again you know there's very little we know. But what what's Based on what little we do know. And even littler that I've sort of talked about in the last few minutes, what's the, what's the board's responsibilities here? And what kind of recourse might starboard have? I I'm sure it's not a whole lot but I mean, as a practical matter, I don't think a whole lot. I mean like assuming nothing more happens, other than say, worst case scenario a proxy contest. Yes. Then you know presumably there would have to be some disclosures about this like because these guys were either OnStar and if there's going to be some kind of proxy contest where we're talking about where people stand and there's going to have to be like what happened there. So I could totally see some kind of demand somewhere that this just be made public beyond that. I mean, the only legal, like, if we really got there, they would look something like Starburst suing, the board for interference with a shareholder vote. I mean, that's really only that like, the only bucket, the only legal. Bucket in which I can put, this is something like a takeover just some sort of disenfranchisement or something. Exactly. And it's it's not really interfering with the show. The photos of prevent anyone from casting a ballot having accounting, but it does maybe interfere with starbirds ability to make its case to shareholders. So the bucket I would put it in maybe is something like a takeover defense and we have, you know, standards for takeover defenses and the, you know, you can only you know, and and when you're interfering with a vote, which is the only thing this would be you have to for your only allowed to do that. If you identify that there's a real threat to corporate policy and it can't simply be that shareholders are going to vote the wrong way, right? Or yeah, we're trying to just place a couple directors. Yeah, it can't be something like we think they're going to vote the wrong way. So it's it's it's so if so if this is somehow trying to deny shareholders and information in some way, then that's the only kind of bucket. I put it in, but it's not really, like a traditional takeover defense that actually prevents the contest from me, right? So I don't even know about going that bucket, you might ask what the base like what exactly was the threat? I mean, like for all, I know they're really was a provision in their Severance agreement. That says, Thou shalt not talk to invest, you know? Like maybe they really, you know. And if that's the case, then like you know, maybe there's really nothing that simply other than, you know, disclosing what happened. So other other than that, it sounds like it. From a probably legal. And also, I would submit from a tactical perspective for Pfizer, probably not stupid of them to get in touch, with these Executives say, closures are forced out because, you know, like I can imagine starboard or someone like you or someone else doing a books and Records demand. Sure. So, you know the internals of what exactly happened and what they got told could prove to be kind of embarrassed, the Optics. I I'm kind of the Optics are going to make no party look good here. Yeah, but in terms of Smith's threat, Starburst threat to for investigation or just, you know, if the boards stonewalls and it continues to look fishy. Then, you know, that's gonna go in the mix that they really do start throwing up, take over defenses or, you know, to interfere with the proxy contest or whatever else. If they start putting, you know they'll go in the mix of this board was improperly motivated. It's under the, you know, they're captured. Yes. So this these two things might be evidence or they do exactly that kind of threatening the two exceptions may be evidence of the board's intent, but per se, the two, the threats to the executives are probably, not really, really to actionable best. It may be evaluated as an impermissible take over to fence but it's just so you know and most of us is denying investors information. So it's hard to say well there's there's a lot more that's going to happen on this. So we could probably stay tuned and monitor, this one? How's that sound? Okay. Shall we shall we? Shall we wrap up? All right. Enough for today. Yep. Sounds like we're done. All right. Good. It's been terrific talking about all. This is shareholder Primacy hosted by and lived in and me, Mike Levin. I'm an independent activist investor and advisor to investors about their activist situations. And and is, of course, the Michael M, Fleischman professor in business, law, and Entrepreneurship at Tulane law school. And also, in affiliate of Tulane's Murphy Institute, you can find me Mike at the activist. Investor.com and Anne at two lane dot edu. Our podcast is produced and distributed by free float media. Thanks for listening and we will see you all again. Very