Sculptor Responds to Daniel S. Och’s Section 220 Demand for Inspection
Summary
Indeed, the only current or former management stakeholders involved in the discussions who failed to provide meaningful concessions to improve the benefits of the Rithm transaction for stockholders are the Och Group members, who have not only proposed their personal stakes being paid in full but who have, in fact, sought preferential treatment. Sculptor only agreed to announce the Special Committee’s ongoing exploration of potential transactions publicly because Mr. Och represented he would approach the process in good faith and without conditioning his consideration on any particular structure (such as the exclusion of existing management). Similarly, the Och Group insisted as a condition of supporting any transaction that Rithm agree to pay them an additional $5.5 million in cash for legal expenses incurred in connection with the Company’s sales process, including counsel costs related to negotiating for their own economic benefits. The Board exercised its business judgment to award a “pay for performance” package that also took into account management’s continued efforts in addressing the ramifications of the Africa bribery matter, the DPA and the disputes and disagreements with Mr. Och and related publicity. To the contrary, the market and the main analyst following the Company reacted positively to the Package when it was first adopted, undoubtedly recognizing that its performance-based metrics aligned Mr. Levin’s pay with the interests of Sculptor’s stockholders and clients.