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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.

 

Representative Engagements

“MATERIAL ADVERSE EFFECT” LITIGATIONS

  • 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.
  • Channel Medsystems, Inc., a medical device start-up, in a major trial victory in the Delaware Court of Chancery in a material adverse event litigation with Boston Scientific Corporation in which Boston Scientific unsuccessfully sought to terminate its $275 million acquisition of the company.
  • Simon Property Group in expedited litigation concerning Simon’s suit to terminate its proposed $3.6 billion acquisition of a majority of Taubman Realty Group due to an alleged COVID-19-related material adverse change. The parties settled on the eve of trial, resulting in an $800 million purchase price reduction—the biggest COVID-19 related discount to date for a major deal.
  • LVMH in expedited litigation in the Delaware Court of Chancery concerning LVMH’s proposed $16.2 billion acquisition of luxury jeweler Tiffany & Co., asserting that a material adverse effect had occurred since the emergence of the COVID-19 pandemic. The parties settled prior to trial, with LVMH agreeing to purchase Tiffany at price below the initial per-share offer.
  • Comtech Telecommunications in securing the favorable settlement of expedited material adverse event litigation in the Delaware Court of Chancery which allowed for the termination of a major merger agreement.
  • 1-800-Flowers.com, Inc. in a merger dispute with Bed Bath & Beyond in the Delaware Court of Chancery in which Bed Bath & Beyond brought a breach of contract action regarding Flowers’ attempt to terminate its agreement to purchase PersonalizationMall.com, citing a material adverse effect as a result of the COVID-19 pandemic. Following an expedited litigation, the parties entered into a settlement agreement and the acquisition was completed at a price below the initial offer.
  • 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, Paul, Weiss achieved a settlement whereby Abbott agreed to close the $5.3 billion acquisition.

BREACH OF FIDUCIARY DUTY LITIGATIONS

  • The independent directors of former CBS Corp. in a shareholder class action brought in the Delaware Court of Chancery alleging breach of fiduciary duty claims, among others, relating to CBS Corp.’s multibillion-dollar stock-for-stock merger with Viacom Inc.
  • The Special Committee and additional independent directors of travel platform Expedia Group, Inc. in a multi-year litigation and internal investigation of claims of a shareholder derivative breach of fiduciary duty class action brought in the Delaware Court of Chancery related to Expedia’s $2.6 billion acquisition of Liberty Expedia Holdings. The investigation determined that the claims were without merit and the litigation concluded with a negotiated settlement.
  • Virtu Financial, a leading high-frequency trading firm, in the successful resolution of a preliminary injunction brought under Section 202 of the Delaware Corporation Law challenging Virtu’s $1.4 billion acquisition of Knight Capital Group. Paul, Weiss subsequently negotiated the favorable settlement of a stockholder class action in the Delaware Court of Chancery alleging breach of fiduciary duty and disclosure-related claims concerning the same transaction.
  • The Special Committee of the Board of Directors of Pilgrim’s Pride Corporation in the successful defense of shareholder derivative litigation brought in Delaware Court of Chancery alleging breach of fiduciary duty claims arising out of Pilgrim’s Pride’s $1.3 billion acquisition of Moy Park from JBS SA.
  • Funds affiliated with Apollo Global Management, LLC in:
    • the settlement of litigation alleging that Apollo Management VIII, L.P. aided and abetted a breach of fiduciary duty by the former directors of Diamond Resorts International, Inc., in connection with the fund’s acquisition of Diamond; and
    • securing the dismissal of claims 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 securing the dismissal of a putative shareholder class action alleging breach of fiduciary duty, negligent misrepresentation and quasi-appraisal claims arising out of Dominion’s $1.2 billion acquisition by The Washington Companies.
  • The Special Committee of the Board of Directors of QAD Inc., a leading provider of cloud-based enterprise software solutions, in defeating a stockholder’s preliminary injunction motion brought in the Delaware Court of Chancery seeking to block a shareholder vote on QAD’s $2 billion merger with private equity firm Thoma Bravo. The ruling, which followed a highly contested hearing and expedited discovery, allowed for the transaction to proceed to a shareholder vote and the sale was completed shortly thereafter.
  • Atos SE, a French IT services provider, in a suit brought in the Delaware Court of Chancery against Bharat Desai, the co-founder and chairman of Syntel, asserting claims related to a fraudulent representation in the merger agreement for Atos’ $3.57 billion acquisition of Syntel.
  • Lawrence Ellison and other defendants, as lead counsel, in a shareholder derivative suit in which plaintiffs allege that defendants breached their fiduciary duties in connection with nominal defendant Autonomous Medical Devices, Inc.’s equity financings. The matter is set for trial in the Delaware Court of Chancery.

DISCLOSURE-RELATED LITIGATIONS

  • Nuance Communications, an American multinational computer software technology corporation, in securing the dismissal of a merger disclosure lawsuit and related motion for attorneys’ fees—a vanishingly rare outcome—brought in connection with Microsoft’s $19.7 billion acquisition of the company.
  • IBM in the successful resolution of shareholder actions alleging disclosure-related claims arising out of IBM’s $34 billion acquisition of Red Hat Inc.
  • Taylor Morrison in several merger-related litigations, including in the successful settlement of shareholder lawsuits alleging disclosure-related claims arising from the company’s $2.5 billion acquisition of William Lyon Homes, and in the settlement of disclosure claims related to its $963 million acquisition of AV Homes.
  • Trine Acquisition Corp. in a shareholder litigation concerning its $2.5 billion combination with 3D printing technology company, Desktop Metal Inc.
  • Shutterfly, Inc. in securing the dismissal, affirmed on appeal by the Third Circuit, of a putative stockholder class action concerning disclosures made in a proxy statement the company issued prior to being acquired in a $2.7 billion transaction.

APPRAISAL LITIGATIONS

  • MPM Holdings Inc., a global leader in silicones and advanced materials, and several of its former directors in shareholder appraisal actions and a breach of fiduciary duty class action consolidated in the Delaware Court of Chancery related to the company’s acquisition by a consortium of three Korean entities. 
  • Diamond Resorts International in 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 the favorable settlement of an appraisal case regarding Oaktree’s buy-out of Pulse Electronics, as well as in the settlement of related breach of fiduciary duty litigation.
  • CKx, Inc. (N/K/A CORE Media Group) in the successful defense of an appraisal proceeding in which the Court of Chancery 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.

SECTION 220 DEMAND LITIGATIONS

  • Cambrian Innovation, a venture-backed cleantech company, in connection with a Section 220 books and records action brought by a director of the company seeking to compel the production of documents related to a settlement agreement with a stockholder entity headed by the director bringing the action. The earlier settlement stemmed from Cambrian’s acquisition of cleantech company Baswood Inc. from Emerson Collective Investments.
  • Independence Holding Company in connection with a Section 220 books and records action brought by a shareholder seeking to compel the production of documents related to a take-private transaction with Geneve, Inc.
  • Outerwall Inc., the parent company of retail kiosks such as Redbox and Coinstar, in connection with a Section 220 stockholder inspection action in order to investigate potential breach of fiduciary duty and other allegations related to the company’s billion-dollar acquisition by funds managed by Apollo affiliates. Following a bench trial, the court denied the plaintiff’s demand entirely.
  • Noble Energy in connection with a Section 220 stockholder inspection action seeking to investigate alleged potential wrongdoing by Noble’s Board of Directors in relation to the merger negotiations resulting in the $12 billion sale of the company to Chevron.
  • Portola Pharmaceuticals, a biotechnology company, in connection with two Section 220 stockholder inspection actions seeking to investigate alleged potential wrongdoing by Portola’s Board of Directors in relation to the company’s $1.4 billion acquisition by Alexion Pharmaceuticals.

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