No one knows quite how the Koch brothers’ recent lawsuit to take shareholder control of the Cato Institute will end, but it seems fair to say that it will seriously wound both parties, and thus, the libertarian cause. . . .
Koch supporters seem far more confident in the legal standing of their argument than Crane’s and Cato’s do. As unusual as Cato’s legal structure is, Niskanen made no mention in his will of what should be done with his shares, and it seems that therefore they must revert to Cato or be offered to the other shareholders.
In fact, the chairman of Cato’s board, Bob Levy, and others seem to admit implicitly that their legal case is shaky, or, at least, not really based on the existing shareholders’ agreement, by admitting that they would like to change the nature of the agreement, or scrap it entirely. Levy explains to National Review Online that “the way forward is to abandon this shareholder structure, substitute a structure where the institute is controlled by members, the way just about every non-profit in the world is, and those members would be the board of directors themselves, so that we have a self-perpetuating board.”