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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.

 

QAD Defeats Preliminary Injunction Against Shareholder Vote in Challenge to Thoma Bravo Merger

Representing a special committee of the board of QAD Inc., on October 8, Paul, Weiss fended off a stockholder’s preliminary injunction motion seeking to block a shareholder vote on QAD’s $2 billion merger with private equity firm Thoma Bravo.

The hedge fund plaintiff sued QAD, a leading provider of cloud-based enterprise software solutions, on July 2 in Delaware Court of Chancery alleging a breach of QAD’s charter and breaches of fiduciary duties in connection with the merger, and sought to block a scheduled shareholder vote on the deal. The plaintiff argues that the merger violates QAD’s charter by providing its controlling shareholder with more favorable consideration than minority shareholders.

In a bench ruling following a highly contested hearing and expedited discovery, Vice Chancellor Paul Fioravanti largely denied the motion, adopting Paul, Weiss’ argument that enjoining the merger would risk substantial harm to unaffiliated QAD stockholders in light of the 20% premium presented by the transaction. In response to the court’s finding that two of the plaintiff’s multitude of disclosure allegations warranted disclosure, QAD made the supplemental disclosures. 

Subject to a vote by a majority of the minority QAD stockholders, QAD and Thoma Bravo will be free to move forward with the merger.

The Paul, Weiss team includes litigation partners Jaren Janghorbani and Geoffrey Chepiga and counsel Daniel Mason

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