UPDATE: Yahoo Shareholders Sue Over Massive Data Breaches (Law 360 paywall)
- Verizon will pay $4.48 billion.
- Perhaps more importantly, Verizon and Yahoo will share the legal and regulatory liabilities arising from the breach under these terms:
- Yahoo will be fully responsible or any cash liabilities incurred following the deal’s closing arising from shareholder lawsuits and Securities and Exchange Commission investigations related to the breaches.
- Yahoo will be responsible for 50% of any liabilities related to any third-party litigation and non-SEC government investigations related to the breaches.
One thing that will be important to see is how the deal terms allocated responsibility for any other data breaches that have occurred but have not yet been discovered. Also, if there is applicable insurance coverage, how would such insurance be applied?
Is this a win for Yahoo? The answer to that will likely depend on the outcome of the data breach litigation and regulatory enforcement actions. This could be substantial. Remember “the paranoids“?
Is it a win for Verizon? Probably. It saved $350 million and is only incurring 50% of the liability for a limited bundle of risks. But, what happens if Yahoo ends up insolvent before all of these liabilities shake out and Yahoo can’t pony up its share?
Source: Verizon shaves $350 million from Yahoo price