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Mergers & Acquisitions
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May 17, 2013
Continental Ducks Shareholder Suit Over $313M Oil Asset Buy
An Oklahoma federal judge on Thursday dismissed a lawsuit accusing Continental Resources Inc. of withholding information from shareholders about a $313 million oil assets acquisition, ruling that Continental executives didn't breach their fiduciary duties because a proxy statement contained enough information about the deal.
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May 16, 2013
Tokyo Court Nixes Creditor Appeal Of $2B Elpida-Micron Deal
Micron Technology Inc. nudged closer to completing its $2 billion acquisition of bankrupt rival Elpida Memory Inc. on Wednesday after a Japanese court rejected an appeal from bondholders challenging Elpida's reorganization plan and the underlying merger between the chipmakers.
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May 15, 2013
FTC Wins Restraining Order In $195M Phoebe Merger Fight
A Georgia federal judge on Wednesday temporarily blocked Phoebe Putney Health System Inc. from further integrating its operations with a nearby rival, a ruling that comes in the Federal Trade Commission's antitrust challenge of the now-consummated $195 million acquisition.
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May 14, 2013
Investors Can't Revive Suit Over Failed $60M Oil Rig Deal
A Texas appeals court on Tuesday ruled that a pair of oil and gas investors could not recover a commission their broker made on a $60 million offshore oil rig acquisition after allegedly misappropriating the investors’ business plan to steer the deal to another client.
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May 13, 2013
Rio Tinto Must Pay Ore Royalties Over Decades-Old JV
An Australian high court ordered a Rio Tinto PLC unit on Friday to pay royalties to two billionaire-backed companies, finding that a 1970 joint venture agreement was still in place despite Rio Tinto losing rights to the land for several years.
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May 10, 2013
KKR Can't Dodge Investor Suit Over $525M Primedia Sale
Private equity firm KKR & Co. LP must face a class action alleging its $525 million sale of Primedia Inc. in 2011 was unfair to the publisher’s minority investors because it shielded KKR from a potentially valuable insider trading claim, a Delaware judge ruled on Friday.
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May 10, 2013
6th Circ. Revives Mich. State Suit Over Axed Pension Plan
The Sixth Circuit on Friday revived a lawsuit brought by former Metaldyne Corp. employees accusing Heartland Industrial Partners LP of invalidating their pension plan to avoid paying them $13 million when it sold the company, finding the state-law suit not preempted by federal law.
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May 10, 2013
Attys Reap $4M Fee In Goodrich Disclosure-Only Settlement
A New York state judge on Friday awarded $4 million in fees to a group of 14 plaintiffs firms for their work in a shareholder class action challenging the $16.5 billion sale of Goodrich Corp. in 2011, one of the larger fee awards in recent years for a disclosure-only settlement.
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May 10, 2013
German Banker Drops Appeal Of Formula 1 Bribery Sentence
A German banker sentenced to eight-and-a-half years in prison for accepting a $44 million bribe in connection with private equity firm CVC Capital Partners Ltd.’s acquisition of a controlling interest in Formula One racing reportedly dropped his appeal of his sentence on Friday.
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May 9, 2013
Harbinger Can't Shake 'Nil' Valuation Of Fallen Bank Stake
A U.K. appeals court rejected embattled hedge fund Harbinger Capital Partners LLC's challenge of an assessment that its shares in fallen British lender Northern Rock PLC are worth nothing, the same day the company struck a deal with U.S. regulators that included an industry ban.
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May 9, 2013
Consol Strikes $43M Deal With CNX Investors Over Buyout
Former minority shareholders of CNX Gas Corp. will receive $42.7 million to settle a class action that challenged Consol Energy Inc.'s $960 million deal to take CNX private in 2010, according to documents filed Wednesday in Delaware Chancery Court.
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May 7, 2013
Sprint Investor Wants $20B Softbank Deal Halted
A Sprint Nextel Corp. shareholder on Tuesday urged a Kansas federal judge to enjoin the company and its top brass from consummating a $20.1 billion tie-up with Softbank Corp., saying investors will face irreparable harm without a preliminary injunction.
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May 3, 2013
2nd Circ. Nixes Derivative Suit Over GE's Mortgage Co. Buys
The Second Circuit on Friday affirmed the dismissal of a shareholder derivative suit over General Electric Co.’s mortgage-servicing acquisitions, agreeing with a lower court that the plaintiffs had failed to adequately plead their claims.
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April 30, 2013
Bergstein Beats Aramid's $190M Suit In NY Appeals Court
Media-financing firm Aramid Entertainment Fund Ltd. failed Tuesday to persuade a New York state appeals court to reverse a lower court’s decision tossing its $190 million suit claiming Hollywood financier David Bergstein and others lied about Aramid to disrupt its planned $130 million asset sale to a private equity firm.
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April 29, 2013
Heinz Beats Investor Actions, Clears Path For Buyout Vote
A Pennsylvania judge on Monday dismissed seven putative class actions alleging H.J. Heinz Co.'s board failed to solicit other offers before accepting a $28 billion buyout from 3G Capital Partners Ltd. and Berkshire Hathaway Inc., clearing the way for a Tuesday vote to finalize the deal.
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April 29, 2013
Yellow Pages Publishers Get Go-Ahead For Ch. 11 Merger
A Delaware bankruptcy judge on Monday signed off on joint Chapter 11 plans for Dex One Corp. and SuperMedia Inc., sealing a merger of the two Yellow Pages publishers that has been more than two years in the making.
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April 26, 2013
FTC's $195M Phoebe Merger Row Remanded By 11th Circ.
The Eleventh Circuit on Friday sent the Federal Trade Commission's antitrust challenge of Phoebe Putney Health System Inc.'s now-consummated $195 million acquisition of a nearby rival back to district court, a ruling that follows the FTC's push for a quick remand.
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April 25, 2013
Willkie Farr Skirts Suit Over $100M Extended Stay Penalty
Willkie Farr & Gallagher LLP on Thursday won its bid to toss a malpractice suit claiming that it exposed the former private equity owner of Extended Stay Inc. to a $100 million liability stemming from the hotel chain's bankruptcy.
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April 25, 2013
Norex's $500M Suit Against BP Untimely: NY Appeals Court
Citing the statute of limitations, a New York state appellate court on Thursday affirmed the dismissal of a complaint brought by Norex Petroleum Ltd. against Russian billionaires, BP PLC and others alleging they plotted to steal Norex’s $500 million stake in a Russian oil company.
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April 25, 2013
Moelis To Pay $5M To End Claims Over Rural/Metro Buyout
Moelis & Co. LLC has agreed to pay $5 million to former Rural/Metro Corp. shareholders to settle class claims that the financial adviser helped push through a lowball private equity bid for the medical transport company in 2011, according to a letter filed Thursday in Delaware Chancery Court.
Expert Analysis
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Rise Of The Machines — Predictive Coding Goes Mainstream
The pros of using predictive coding far outweigh the cons. Given the heavy pressure on law firms and in-house counsel to reduce discovery costs, as well as the Justice Department's recent stance on the subject, it appears predictive coding will continue to emerge from the obscure world of legal technology to the mainstream of legal practice, say Michael Moscato and Myles Bartley of Curtis Mallet-Prevost Colt & Mosle LLP.
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PE Investors Should Consider Behavioral Health
As demand for behavioral health services increases, and those individuals with need have insurance that will pay for it, the growth potential for behavioral health services is significant. Private equity investors are well-poised for jumping into this market to bring new business models and innovation to the industry, say attorneys with McGuireWoods LLP.
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SEC’s Unbundling Rules Get Breath Of Life
The U.S. Securities and Exchange Commision’s “unbundling” requirements have largely been the stuff of SEC lore — periodically referred to but rarely seen in corporate governance matters. However, thanks to the high profile dispute between David Einhorn’s Greenlight Capital and Apple, the unbundling rules may finally be coming out of the shadows, say attorneys with King & Spalding LLP.
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Recent Trends In M&A And Corporate Fiduciary Litigation
In 2012, shareholders challenged 93 percent of all merger and acquisition transactions with a value greater than $100 million and 96 percent of M&A transactions with a value greater than $500 million. In other words, it almost is inevitable nowadays that litigation will follow a merger or going private announcement — with an average of about five lawsuits per transaction, say attorneys with Arnold & Porter LLP.
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5 Reasons For Optimism In The Venture Capital Community
Not every company can be the next Facebook. But thankfully, for many startups, generating one billion users is not the end goal, nor should it be. Enter “narrowcasting” — one of a few reasons to be optimistic about venture capital, despite the first quarter of 2013 being the slowest for fundraising since 2002, says David Kaufman of Thompson Coburn LLP.
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Know The IRS Stance On Acquisition Deduction Issues
In the past, the IRS informally warned taxpayers not to seek technical advice on the applicability of the “which day” rule in the acquisition contex because they might not be happy with the agency's position. These statements were prescient, as the IRS recently released guidance on the subject, say attorneys with Paul Hastings LLP.
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A Model For Facing Meritless Derivative Suits In Pa.
The decision by the Allegheny County Court of Common Pleas in In re H.J. Heinz Co. Derivative and Class Action Litigation represents a faithful application of the American Law Institute’s Principles of Corporate Governance, which were formally adopted by the Pennsylvania Supreme Court in the landmark decision Cuker v. Mikalauskas, say attorneys with Dechert LLP.
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Appraisal Rights — The Next Frontier In Deal Litigation?
Although it is too early to predict whether we will see a true wave of appraisal cases, current market conditions and developments suggest that dissenters’ rights may merit a reappraisal, say attorneys with Kirkland & Ellis LLP.
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SEC Tees Up Private Equity Enforcement Issues
Recent remarks by Bruce Karpati, chief of the Asset Management Unit of the U.S. Securities and Exchange Commission, as well as recent enforcement cases by the SEC, demonstrate an increased focus on the private equity sector — in particular, on aggressive fundraising disclosures, conflicts of interest and “zombie funds,” among other things, say Scott Naidech and Garrett Lynam of Chadbourne & Parke LLP.
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Del. Draws Line In The Sands Of Discovery
In resolving Morgans Hotel Group Co. Kalisman v. Friedman, the Delaware Court of Chancery carefully drew the line to allow discovery of communications between counsel and a special committee that the plaintiff-director was a member of, but shielded communications between counsel and a subcommittee on which the plaintiff-director did not serve, says Herbert Kozlov of Reed Smith LLP.