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A small group of New York Stock Exchange Inc. members filed a motion in New York State Supreme Court Tuesday seeking a preliminary injunction to postpone the exchange’s member vote on its proposed deal to buy electronic trading company Archipelago Holdings Inc. The 11 dissidents, led by longtime seat owner William Higgins, filed a motion for a preliminary injunction to halt the Dec. 6 vote for 30 days. The group said the deal as it stands shortchanges the members. The dissenting members want a new valuation for the deal and for NYSE chief executive John Thain to recuse himself from all negotiations. “We are asking the court to essentially freeze-frame the merger until all seat holders have an opportunity to understand how it was conceived, structured, valued and brokered,” Jay Eisenhofer, an attorney representing members suing the exchange, said in a statement. He said the current transaction “constitutes a sweetheart deal” at the expense of the NYSE seat holders. Higgins also requested that State Supreme Court Justice Charles Ramos appoint an independent board to review the merger and to obtain a commitment from the NYSE board to obtain a fairness opinion from an independent financial adviser. Additionally, the motion asks that the Big Board release certain documents from the NYSE and Goldman, Sachs & Co., the bank that advised the exchange on the deal, to other NYSE members. Those documents have been provided to the court, Higgins and his attorneys, but they remain under seal and have not been circulated to other exchange seat holders The NYSE responded in a strongly worded statement Tuesday, saying that the “action is wrong and is an affront to shareholder democracy.” The exchange said it would “vigorously” fight to defend the rights of its members to vote on the deal. The hearing in the case is expected to take place next week before Ramos. The motions are the latest development in a complaint originally brought by Higgins in May. Some other seat holders have joined him, arguing that terms of the deal were unfair to the NYSE’s 1,366 members and favored Archipelago shareholders. The complaint claims the board of the exchange, including Thain, failed to seek sufficient independent advice in assessing how the deal valued the 213-year-old exchange. It accuses Goldman of aiding members of the NYSE’s board in the “alleged breach of their fiduciary duties to NYSE members, all allegedly to Goldman Sachs’ substantial benefit” and that Goldman’s role was conflicted. The NYSE announced its proposed acquisition of Archipelago on April 20. The exchange’s 1,366 members each will receive roughly $3.3 million in stock in the combined company, which will be called NYSE Group Inc., and about $300,000 in cash. Thain has said that he also plans to distribute any excess cash in addition to the $300,000. While dissident shareholders have not floated any alternative terms for the merger, they have noted that Archipelago’s stock skyrocketed after the deal was announced, indicating a windfall for its shareholders. The stock now trades at roughly $50, up from a yearly low of $15.70 the day deal was announced. Goldman advised both the NYSE and the Chicago-based trading venue in their merger agreement. At the time, Goldman owned a 15 percent stake in Archipelago and held 21 NYSE memberships seats. The deal still requires regulatory approval and a favorable vote by two thirds of the seat holders. Copyright �2005 TDD, LLC. All rights reserved.

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