Justia Mergers & Acquisitions Opinion Summaries

RAA appealed from a final judgment of the Superior Court that dismissed its complaint pursuant to Rule 12(b)(6). RAA's complaint alleged that Savage told RAA, one of several potential bidders for Savage, at the outset of their discussions that there was "no significant unrecorded liabilities or claims against Savage," but then during RAA's due diligence into Savage, Savage disclosed three such matters, which caused RAA to abandon negotiations for the transactions. The complaint contended that had RAA known of those matters at the outset, it never would have proceeded to consider purchasing Savage. Therefore, according to RAA, Savage should be liable for the entirety of RAA's alleged $1.2 million in due diligence and negotiation costs. The court held that, under Paragraphs 7 and 8 of the non-disclosure agreement (NDA), RAA acknowledged that in the event no final "Sale Agreement" on a transaction was reached, Savage would have no liability, and could not be sued, for any allegedly inaccurate or incomplete information provided by Savage to RAA during the due diligence process. The court also held that RAA could not rely on the peculiar-knowledge exception to support its claims. Finally, the court held that, when Savage and RAA entered into the NDA, both parties knew how the non-reliance clauses had been construed by Delaware courts. Accordingly, the court affirmed the judgment. View "RAA Management, LLC v. Savage Sports Holdings, Inc." on Justia Law

Plaintiffs brought their Verified Complaint asserting claims for breach of contract and breach of the implied covenant of good faith and fair dealing against defendant. J.P.Morgan also asserted a claim for attorneys' fees and costs under an option agreement that J.P. Morgan and defendant entered into, which was the contract central to the dispute. Defendant moved to dismiss pursuant to Court of Chancery Rule 12(b)(6). The court held that J.P. Morgan has failed to state a claim that defendant breached the express terms of the Option Agreement and therefore, defendant's motion to dismiss was granted as to Count I. Defendant's motion to dismiss was denied as to Count II because J.P. Morgan's allegations, taken together, were sufficient to state a claim of the implied covenant. Finally, defendant's motion to dismiss was denied as to Count III where J.P. Morgan could eventually be the prevailing party in this action. View "JPMorgan Chase & Co. v. American Century Co." on Justia Law

This was an appraisal proceeding brought pursuant to 8 Del. C. 262. Petitioners, former shareholders and managers of a prison healthcare detention company, sought appraisal of their shares following an all cash acquisition of the company for $40 million. The court found that the fair value of Just Care as of September 30, 2009 was $34,244,570. The parties shall cooperate to determine the amount of the interest award in accordance with the rulings in the opinion and petitioners shall present, on notice, an appropriate proposed order of final judgment specifying, among other things, the corresponding fair value per common share and per Series A preferred share within 10 days. View "Gearreald v. Just Care, Inc." on Justia Law

This dispute arose from the merger between plaintiff's start-up company, LaneScan, and VSAC. Plaintiffs complained that the Merger improperly deprived them of their Notes and that a return of capital provision was inappropriately excised from LaneScan's Amended and Restated Limited Liability Company Operating Agreement in conjunction with the merger. For damages, plaintiffs requested a return of their original investment in LaneScan with pre- and post-judgment interest, attorneys' fees and expenses. The court granted plaintiffs' request for a declaratory judgment with respect to the Notes and the Security Agreement, and it reserved decision on plaintiffs' request for an award of legal fees and expenses related to the Notes Claims, to the extent such request was based upon section 2.3 of the Notes and plaintiffs' successful showing on the declaratory judgment claim. The court ruled in favor of defendants with respect to all of plaintiffs' other claims. View "Dawson v. Pittco Capital Partners, L.P." on Justia Law

This action arose out of the merger of Answers with A-Team, a wholly-owned subsidiary of AFCV, which in turn, was a portfolio company of the private equity firm Summit (collectively, with A-Team and AFCV, the Buyout Group). Plaintiffs, owners of Answers' stock, filed a purported class action on behalf of themselves and all other similarly situated public stockholders of Answers. The court concluded that the complaint adequately alleged that all of the members of the Board breached their fiduciary duties. Therefore, the motions to dismiss the First Cause of Action were denied, except as to the disclosure claim that plaintiffs have abandoned. The court also concluded that plaintiffs have adequately pled that the Buyout Group aided and abetted a breach of the Board's fiduciary duty. Therefore, the motions to dismiss the Second Cause of Action were denied. View "In re Answers Corp. Shareholders Litigation" on Justia Law

This was a class action brought on behalf of the common unit holders of a publicly-traded Delaware limited partnership. In March 2011, the partnership agreed to be acquired by an unaffiliated third party at a premium to its common units' trading price. The merger agreement, which governed the transaction, also provided for a separate payment to the general partner to acquire certain partnership interests it held exclusively. The court concluded that defendants' approval of the merger agreement could not constitute a breach of any contractual or fiduciary duty, regardless of whether the conflict committee's approval was effective. The court also found that the disclosures authorized by defendants were not materially misleading. Therefore, plaintiffs could not succeed on their claims under any reasonable conceivable set of circumstances and defendants' motion to dismiss was granted. View "In re K-Sea Transportation Partners L.P. Unitholders Litigation" on Justia Law

This putative class action was before the court on an application for the approval of settlement of the class's claims for, among other things, breaches of fiduciary duty in connection with a merger of two publicly traded Delaware corporations. The target's largest stockholder, which acquired the vast majority of its shares after the challenged transaction was announced, objected to the proposed settlement. In addition, defendants' and plaintiffs' counsel disagreed about the appropriate level of attorneys' fees that should be awarded. The court certified the class under Rules 23(a), (b)(1), and (b)(2) with NOERS as class representative; denied BVF's request to certify the class on only an opt out basis; approved the settlement as fair and reasonable; and awarded attorneys' fees to plaintiffs' counsel in the amount of $1,350,000, inclusive of expenses. View "In re Celera Corp. Shareholder Litigation" on Justia Law

Holston sued LanLogistics for breach of contract when LanLogistics never gave Holston an opportunity to match Gartlan's offer to purchase LanBox. Holston was a citizen of Florida and LanLogistics was incorporated in Delaware, maintaining its corporate headquarters in Miami, Florida. But by the time Holston filed suit, LanLogistics had dissolved and formally forfeited its authority to conduct business in Florida. At issue on appeal was the citizenship of a dissolved corporation for purposes of diversity jurisdiction and whether summary judgment was appropriately entered where there could have been a genuine issue of material fact. The court held that LanLogistics was only a citizen of Delaware and the court had subject matter jurisdiction where LanLogistics dissolved and formerly withdrew from business before Holston filed suit. The court reversed the district court's supplemental summary judgment order and remanded for a determination regarding the fair market value of each company in the package deal to identify the percentage of the purchase price used to purchase LanBox. View "Holston Investments Inc. B.V.I., et al. v. LanLogistics, Corp." on Justia Law

This action arose out of the merger of American Surgical with merger Sub, a wholly-owned subsidiary of Holdings, which, in turn, was an affiliate of Great Point. Plaintiff brought this purported class action to challenge the merger and alleged that American's Surgical Board and its Control Group breached their fiduciary duties in connection with the merger. Plaintiff also alleged that the Purchasing Entities aided and abetted those breaches of fiduciary duty. The court granted defendants' motion to dismiss Cause of Action IV, which alleged that the Purchasing Entities aided and abetted the breaches of fiduciary duty committed by the members of the Control Group and Board. The court, however, denied the motion to dismiss as to Causes of Action I, II, and III. View "Frank v. Elgamel, et al." on Justia Law

Stockholder plaintiffs sought a preliminary injunction to enjoin a merger between El Paso and Kinder Morgan. The CEO of El Paso undertook sole responsibility for negotiating the sale of El Paso to Kinder Morgan in the merger but did not disclose to El Paso's Board his interest in working with other El Paso managers in making a bid to buy El Paso's exploration and production (E&P) business. Further, the Board and management of El Paso relied in part on advice given by a financial advisor, Goldman Sachs, which owned 19% of Kinder Morgan and controlled two Kinder Morgan board seats. The court concluded that plaintiffs have a reasonable likelihood of success in proving that the merger was tainted by disloyalty. Because, however, there was no other bid on the table and the stockholders of El Paso, as the seller, have a choice whether to turn down the merger themselves, the balance of harms counseled against a preliminary injunction. Although the pursuit of a monetary damages award could not be likely to promise full relief, the record did not instill in the court the confidence to deny, by grant of an injunction, El Paso's stockholders from accepting a transaction that they could find desirable in current market conditions, despite the disturbing behavior that led to its final terms. View "In Re El Paso Corporation Shareholder Litigation" on Justia Law