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 shareholers:
| • 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);
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| • In re MONY Group, Inc. Shareholders Litigation, |
C.A. No. 20554 (Del. Ch. 2004)
(The Delaware Chancery Court issued 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 of MONY's 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; this is the only case of which we are aware that has resulted in the forfeiture of executive compensation);
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| • 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);
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| • In re Arco Chemical Co. Shareholders Litigation, |
No. 16493-NC (Del. Supreme Ct. 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);
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| • 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 & 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
comprised of outside directors; the creation of a nominating
committee;
the requirement that the audit committee oversee corporate
compliance; and
the requirement that the audit committee be composed of
outside directors); and
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• In re Sears, Roebuck Derivative Litigation,
|
(Ill. Ch. Ct.)
(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).
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