Citigroup Wins Dismissal of Aiding and Abetting Claim In Delaware Chancery Court

Paul, Weiss won the dismissal of a claim that our client, Citigroup, aided and abetted alleged breaches of fiduciary duty in its role as a financial advisor to Tesaro, an oncology-focused biopharmaceutical company. Vice Chancellor Morgan T. Zurn of the Delaware Court of Chancery granted our motion to dismiss with prejudice.

The suit arose out of Tesaro’s acquisition by GlaxoSmithKline (GSK) in a transaction valued at roughly $5.1 billion and overwhelmingly approved by Tesaro stockholders. The plaintiff, a former Tesaro stockholder, claimed that Tesaro’s former directors and officers breached their fiduciary duties in approving the transaction and that Citigroup aided and abetted the alleged breaches. The plaintiff’s aiding and abetting allegations against Citigroup were based principally on contentions that Citigroup failed to timely or sufficiently disclose purported conflicts of interest arising from its relationship with the buyer, GSK.

In its decision, the court held that the plaintiff had failed to plead any facts suggesting that the disclosures provided to Tesaro’s stockholders concerning the transaction were materially false or misleading. Accordingly, the Tesaro stockholders’ approval and ratification of the transaction, on an informed and uncoerced basis, required the dismissal with prejudice of all of the plaintiff’s claims, including his aiding and abetting claims against Citigroup. In so ruling, the court rejected the plaintiff’s contention that Tesaro had not adequately disclosed Citigroup’s relationship and previous work with GSK, concluding that Tesaro’s disclosures on that subject were sufficient under Delaware law.

The Paul, Weiss team included litigation partners Bruce Birenboim (who argued the motion to dismiss) and Susanna Buergel and counsel Dan Mason.