Corporate Governance Reforms

The Firm has had particular success using litigation to accomplish corporate governance improvements for shareholders. The Firm has served as lead counsel in numerous corporate governance and corporate takeover cases (both hostile and friendly) on behalf of stockholders of public corporations, and has prosecuted actions challenging numerous highly publicized corporate transactions that violated fair process and fair price and did not fall within the protections of the business judgment rule. These efforts brought about multi-million dollar improvements in transaction terms and strengthened the democratic rights of public shareholders:

  • In re Freeport-McMoRan Copper & Gold, Inc. Derivative Litigation, No. 8145-VCN (Del. Ch. 2015) (the Firm, as co-lead counsel, recovered $137.5 million for shareholders and obtained an unprecedented provision allowing the settlement to be distributed to Freeport shareholders in the form of a special dividend.  The settlement is one of the largest derivative settlements in the Delaware Court of Chancery history);
  • In re Great Wolf Resorts, Inc. Shareholders Litigation, No. C.A. 7328-VCS (Del. Ch. 2012) (the Firm obtained the elimination of stand-still provisions that allowed third parties to bid for Great Wolf Resorts, Inc. (“Great Wolf”) – resulting in the emergence of a third-party bidder and approximately $94 million in additional merger consideration for Great Wolf’s shareholders);
  • In re Atlas Energy, Inc. Shareholders Litigation, No. C.A. 5990-VCL (Del. Ch. 2011) (the Firm obtained a settlement providing an additional $7.45 million in merger consideration for Atlas Energy shareholders);
  • In re Pride International, Inc. Shareholders Litigation, No. C.A. 6201-VCS (Del. Ch. 2011) (after the completion of expedited discovery and prior to a preliminary injunction hearing, the Firm obtained a proposed settlement providing material modifications to a contested merger agreement and the dissemination of supplemental disclosures in connection with a proxy statement sent to Pride shareholders);
  • In re Mutual Funds Investment Litigation [Federated Sub-Track], No. 04-MD-15861 (CCB) (D. Md. 2010) (representing investors in Federated Investors Funds fluctuating mutual funds, the Firm obtained a total settlement of $3,381,500 in addition to significant corporate governance reforms.  The benefits obtained by the Firm were in addition to $72 million that Federated Investors, Inc. (“Federated”) paid pursuant to the settlement of regulatory investigations concerning Federated’s alleged market-timing and late-trading activities.  The Firm also obtained declaratory and injunctive relief to ensure that the alleged market-timing and late-trading activities would not be repeated);
  • In re Mutual Funds Investment Litigation [Bank of America/Nations Sub-Track], No. 04-MD-15862 (JFM) (D. Md. 2010) (representing investors in Nations Fund Mutual Funds (the “Nations Funds”), the Firm, with lead counsel, achieved settlements that resolved the class action and several related litigations arising from alleged market timing and late trading in various mutual funds in the Bank of America mutual fund family.  The settlements established a jointly-recommended minimum allocation of at least $60 million to shareholders of the Nations Funds from a fund created as a result of Bank of America’s settlement of regulatory investigations.  In addition to the monetary allocation, the settlements provide for corporate governance changes concerning the detection and prevention of future market timing and late trading in the Nations Funds.  The Firm and lead counsel also recovered an additional $2,100,000 from non-Bank of America defendants);
  • Kwait v. Berman, No. 5306-CC (Del. Ch. 2010) (obtained significant amendments to a voting agreement agreed to by RiskMetrics Group, Inc.’s interested shareholders in connection with a proposed merger, as well as additional disclosures concerning the proposed merger);
  • In re UnitedGlobalCom Shareholders Litigation, No. 1012-VCS (Del. Ch. 2008) (plaintiffs, former shareholders of UnitedGlobalCom (“UGC”), successfully recovered a $25 million settlement in a case alleging that a minority exchange transaction with UGC’s majority shareholder did not meet the entire fairness standard);
  • In re Cablevision System Corp. Shareholders Litigation, No. 05-009752 (N.Y. Sup. Ct. 2007) (plaintiffs successfully deterred a going-private transaction proposed by Cablevision’s controlling shareholder at an inadequate price. The proposal was ultimately converted to a $2.5 billion special dividend payable ratably to all Cablevision shareholders. In connection with the settlement, Cablevision agreed to implement corporate governance reforms and other procedures to ensure that the special dividend was financially fair to Cablevision and its public shareholders);
  • In re MONY Group, Inc. Shareholders Litigation, C.A. No. 20554 (Del. Ch. 2004) (the Delaware Chancery Court issued a preliminary injunction enjoining the shareholder vote on the merger pending the issuance of curative disclosures by the MONY defendants; as part of the settlement, certain MONY executives forfeited approximately $7.4 million in change-of-control payments, funding an increase in the consideration received by MONY’s shareholders in the merger);
  • In re Plains Resources, Inc. Shareholders Litigation, No. 071-N (Del. Ch. 2004) (plaintiffs alleged claims in connection with the buyout of the public shares of Plains Resources by two of the company’s senior executives and Vulcan Energy, an affiliate of Paul Allen. Through the Firm’s aggressive efforts as co-lead counsel, which included motions for expedited discovery and a preliminary injunction, the price paid for Plains Resources shares in connection with the buyout was increased twice, yielding an additional $67 million in merger consideration);
  • In re Arco Chemical Co. Shareholders Litigation, No. 16493-NC (Del. Sup. 2002) (the Firm’s advocacy led the Delaware Supreme Court to require the company to broaden the rights of public shareholders in change-of-control transactions; $17.6 million recovered (minority shareholders represented by the Firm received over 50% of claimed value left on the table in merger discussions, and actually received more than a controlling shareholder in the sale of the company));
  • In re AXA Financial Shareholders Litigation, No. 18268 (Del. Ch. 2002) ($500 million increased merger consideration);
  • In re Kroll-O’Gara Shareholder Litigation, No. 99 Civ. 11387 (S.D.N.Y. and Ohio State Ct. 2002) (derivative case brought on behalf of Kroll-O’Gara to remedy internecine disputes among the company’s senior management; the case settled with significant corporate governance changes, including an independent committee of directors to oversee change-of-control transactions and certain other internal management issues);
  • Shapiro v. Quickturn Design Systems, Inc., No. 16850 NC (Del. Sup. 2002) (the Firm successfully represented public stockholders in a trial in Delaware Chancery Court that invalidated a modified “deadhand” poison pill anti-takeover provision; the Delaware Supreme Court affirmed the trial verdict, paving the way for a takeover of Quickturn at a premium of approximately $51 million);
  • In re Ascent Entertainment Group Inc. Derivative Litigation, No. 17201-NC (Del. Ch. 2000) (involving the proposed sale of the Colorado Avalanche and the Denver Nuggets, both owned at the time by Ascent, to Ascent’s CEO and chairman; by virtue of the Firm’s representation, Ascent commenced a new auction for the sports teams, which resulted in a higher price (approximately $40 million) to be paid for the teams; also by virtue of the settlement, the parties agreed that the plaintiffs could appoint a director of their choosing to the Ascent board);
  • In re Foamex International Inc. Shareholders Litigation, No. 16259-NC (Del. Ch. 2000) (the Firm’s efforts culminated in the requirements that the company appoint two independent directors, that it constitute a nominating committee to search for and recommend new independent directors, and that any related-party transactions be reviewed and approved by a majority of disinterested directors);
  • In re Archer Daniels Midland Corp. Derivative Litigation, No. 14403 (Del. Ch. 1997) (the Firm, as lead counsel, effected important corporate governance improvements, including the requirement that a majority of the board be a comprised of outside directors; the strengthening of the nominating committee; the requirement that the audit committee oversee corporate compliance; and the requirement that the audit committee be composed of outside directors); and
  • In re Sears, Roebuck Derivative Litigation (Ill. Ch.) (founding partner Stanley Bernstein pioneered the use of litigation to achieve corporate governance reform in the early 1990s, gaining the addition of outside directors to Sears’ board, and expanding the role of outside directors in the company’s nominating committee).