Mergers & Acquisitions Litigation
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.
- “Material Adverse Change” Litigations
- Alere, Inc., a medical device and point-of-care testing company, in its closely-watched “material adverse change” litigation with Abbott Laboratories in which, after an expedited proceeding, we achieved a settlement whereby Abbott agreed to close the $5.3 billion acquisition.
- Channel Medsystems, Inc., a medical device start-up, in a trial victory in connection with a “material adverse change” litigation with Boston Scientific Corporation in which Boston Scientific unsuccessfully sought to terminate its $250 million acquisition of the company.
- Fresenius SE & Co., a German healthcare company, in a landmark ruling, affirmed by the Delaware Supreme Court, that Fresenius was justified in terminating a $4.8 billion merger agreement with Akorn Pharmaceuticals due to Akorn’s post-signing decline and Akorn’s blatant breaches of FDA data integrity requirements, both constituting Material Adverse Events (MAE) under Delaware law. The decision was the first to find an MAE justified based on post-signing financial decline and other factors.
- Breach of Fiduciary Duty Litigations
- Elliott Associates in the dismissal, affirmed on appeal, of a stockholder lawsuit filed in the Michigan Circuit Court for Wayne County challenging Thoma Bravo’s acquisition of Compuware Corporation. In their lawsuit filed in 2015, the plaintiffs—the former chairman and CEO of Compuware and his four minor children, all former Compuware shareholders—asserted twelve causes of action against Compuware, certain of Compuware’s former directors and officers, Thoma Bravo and Elliott Associates, including, among other causes of action, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and various fraud claims. In December 2016, the Michigan Circuit Court granted summary disposition in favor of all defendants, including Elliott Associates, concluding that the plaintiffs lacked standing to pursue their claims (which were derivative in nature under Michigan law) and failed to state a claim upon which relief could be granted. In November 2018, the Michigan Court of Appeals affirmed the lower court’s ruling, confirming that the plaintiffs lacked standing to pursue their claims.
- Funds affiliated with Apollo Global Management, LLC in:
- successfully defending a shareholder class action arising from Apollo’s $560 million acquisition of CORE Media Group, where plaintiffs claimed entities affiliated with Apollo aided and abetted CORE’s directors in alleged breaches of their fiduciary duties in failing to disclose material information and in fixing an unfair price per share; and
- securing dismissal of claims against Apollo for aiding and abetting the alleged breaches of fiduciary duty of ClubCorp’s directors in a $2.2 billion take-private transaction.
- Dominion Diamond in the successful defense of a preliminary injunction proceeding in which a class of shareholders sought to enjoin the $1.2 billion acquisition of Dominion Diamond by The Washington Companies.
- Kohlberg Kravis Roberts & Co. in the successful settlement of a shareholder derivative action asserting breach of fiduciary duty claims that arose out of the buy-out of Primedia, Inc. by affiliates of TPG Capital, L.P.
- M&F Worldwide Corporation and its board of directors in the dismissal on summary judgment, affirmed on appeal, of a suit brought by a group of minority shareholders who challenged the fairness of a going-private transaction negotiated by a special committee and approved by a majority of the minority shareholders.
- Morgan Stanley Private Equity Asia in the successful defense of shareholder litigation in Nevada state court arising out of a $339 million buy-out of Yongye International, a Chinese Agricultural nutrient company. We defeated two successive preliminary injunction motions and the transaction closed.
- Disclosure-Related Litigations
- Ariad Pharmaceuticals and its directors in defending shareholder litigation that alleged Ariad’s disclosures concerning the company’s $5.2 billion sale to Takeda Pharmaceutical Co. were false and misleading.
- Bank of America in securing the successful settlement of SEC claims in connection with alleged proxy statement misrepresentations and omissions made by BofA regarding the bank’s acquisition of Merrill Lynch & Co., as well as subsequent settlements with a shareholder class and the Office of the New York Attorney General concerning those same disclosures.
- Omega Protein Corporation and its board of directors in various state and federal shareholder lawsuits asserting that Omega’s disclosures in the proxy statement were false and misleading. All plaintiffs voluntarily dismissed their actions and the transaction closed.
- Silver Bay Realty Trust Corporation and its board of directors in the successful dismissal of claims filed by a class of shareholders in federal court alleging misrepresentations and omissions in Silver Bay’s proxy statement in connection with its $1.4 billion acquisition by Tricon Capital Group.
- Appraisal Litigations
- CKx, Inc. in the successful defense of an appraisal proceeding in which the Chancery Court held, after a full trial on the merits, that the merger price being offered by the acquirer, certain funds managed by affiliates of Apollo Global Management, LLC, was the best available measure of CKx’s fair value. That decision was affirmed by the Delaware Supreme Court.
- Diamond Resorts International, Inc. in the defense of a consolidated appraisal proceeding in which shareholders who did not tender their shares during the company’s $2.2 billion acquisition by funds managed by affiliates of Apollo Global Management, LLC, petitioned for an appraisal of the fair value of their shares.
- Oaktree Capital Management in securing a favorable settlement of appraisal case related to Oaktree’s buy-out of Pulse Electronics.