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Clients with major transactions routinely face shareholder and other litigation seeking to block or enforce a deal. As experienced and business-savvy litigators, we are able to fend off many such cases, often breaking new legal ground in the process.

 

Nuance Wins Dismissal of Shareholder Suit Stemming from $19.7 Billion Sale to Microsoft

Paul, Weiss secured the dismissal of a shareholder lawsuit and related motion for attorneys’ fees brought in connection with Microsoft’s proposed acquisition of our client, Nuance Communications, Inc., a provider of speech and imaging software.

The complaint alleged that Nuance and members of the Nuance board of directors violated federal securities laws by filing a proxy statement that omitted various pieces of information related to the proposed transaction. These lawsuits are commonly filed in connection with public company transactions and they frequently settle for nominal sums early in the litigation after the companies agree to supplement their proxy statements with additional details. Twelve such lawsuits were filed in connection with the Microsoft-Nuance transaction, and eleven were dismissed following Nuance’s filing of supplemental disclosures. One shareholder refused to dismiss his complaint and sought $250,000 in attorneys’ fees for his “efforts” in securing supplemental disclosures. Nuance opposed the motion, arguing that the proliferation of meritless lawsuits of this kind confers no benefits on shareholders, serves only to enrich plaintiffs’ firms and effectively constitutes a tax on corporate transactions.

On February 7, Judge J. Paul Oetken of the Southern District of New York agreed with Nuance and denied the motion in its entirety, holding that the plaintiff had failed to confer a substantial benefit on shareholders and dismissing the underlying claims as moot.

The Paul, Weiss team included litigation partner Jaren Janghorbani

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