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The New York Stock Exchange must turn over documents related to its proposed acquisition of Archipelago Holdings Inc. to three seat holders pressing for details on how the exchange valued the $3 billion deal, a state court ruled Wednesday. New York State Supreme Court Justice Charles Ramos granted the records request of seat holders William Higgins, Robert Dill and Michael Quinn, but also issued a temporary stay pending a possible appeal. Ramos gave the NYSE three days to file an appeal. NYSE spokesman Ray Pellecchia said the exchange would challenge the decision, arguing that it is unfair for only the complainants to review the records. “We will appeal this decision, appeal it to uphold the principle that there should not be selective disclosure,” he said. But Jay Eisenhofer, a partner with Wilmington, Del., law firm Grant & Eisenhofer PA who represents Dill, Quinn’s estate and Higgins, along with Philadelphia firm Raynes McCarty, said his clients will make the information available to other exchange members. “We don’t want selective disclosure. We’ll offer them to everyone,” Eisenhofer said. “We’ll create a Web site.” The NYSE had promised to release details of its purchase of Archipelago, a Chicago-based electronic trading network, in a regulatory filing by July 22. Ramos is determined that, with shareholder proxies due to be mailed in October and a possible vote on transaction scheduled for November, seat owners have prompt access to the documents. Lawyers for seat holders successfully argued in the hearing that the owners should be able to examine the documents the NYSE’s board of directors used in voting to approve the merger. In a separate ruling, Ramos denied the NYSE’s motion of a protective order, allowing Higgins to proceed with a discovery motion related to a consolidated class action challenging the Archipelago merger. Higgins has been joined by fellow seat holder William Tipton Caldwell in what is now a consolidated class action, that alleges that the NYSE’s board abdicated its fiduciary duties by structuring merger terms with Archipelago that harmed the interest of seat holders. That suit also alleges a conflict of interest in the deal involving investment banks Goldman, Sachs & Co. and Lazard, which advised both Archipelago and the NYSE in the transaction while Goldman was underwriting Lazard’s initial public offering. Higgins filed suit in May to stop the acquisition, claiming that the deal undervalued the 213-year-old exchange. In June, fellow seat holders Dill and Quinn’s estate joined him in filing a suit demanding an independent assessment of the NYSE’s value. Copyright �2005 TDD, LLC. All rights reserved.

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