Yahoo Controversy Scott ThompsonThis is the next shoe to drop after the board didn’t go along with the demand by Third Point chief Daniel Loeb to fire Yahoo CEO Scott Thompson by noon ET today. The hedge fund manager. who controls 5.8% of Yahoo shares, says that Delaware General Corporation Law entitles him to inspect books and records beginning September 1 tied to the board’s decision to hire Thompson, as well as other material that would shed light on the naming of directors Patti Hart, Peter Liguori, John Hayes, Thomas McInerney, Maynard Webb Jr, and Fred Amoroso. The dissident shareholder has hired law firms Willkie Farr & Gallagher and Bouchard Margules & Friedlander to conduct the inspection on his behalf.

Loeb says Yahoo is embroiled in a “debacle” after it acknowledged that it had misrepresented Thompson and Hart’s college degrees. It said in a proxy and on the website that Thompson had a bachelor’s degree in accounting and computer science from Stonehill College — the degree was actually in business administration with a major in accounting. And Hart got her bachelor’s degree from Illinois State University in business administration with specialties in marketing and economics — company documents say her degree was in marketing and economics. The company said it would investigate the “inadvertent” error. But Loeb isn’t satisfied: “We believe that this internal investigation by this Board must not be conducted behind a veil of secrecy and shareholders deserve total transparency,” he says. Loeb is lobbying to be named to the Yahoo board along with three associates: corporate restructuring expert Harry Wilson, media consultant Michael Wolf, and former NBCUniversal CEO Jeff Zucker.