Justia Mergers & Acquisitions Opinion Summaries

This action was before the court on a motion to expedite regarding a transaction in which a Delaware limited partnership was to be acquired for either cash or a combination of cash and the acquirer's stock. Plaintiff-unitholders of the target claim that the process undertaken by the conflicts committee was deficient and therefore, legally ineffective because it failed to consider the fairness of payments made to certain conflicted parties and the independence of the conflicts committee members was tainted by a grant of unvested phantom units they received shortly before merger discussion began. Plaintiffs also contended that the directors failed to provide adequate disclosures to enable the unitholders to make an informed decision as to whether to vote for the transaction. Plaintiffs also asserted that they will suffer irreparable harm if prompt equitable relief was not granted because the general partner of the target was controlled by three allegedly single-purpose entities whose sole assets were their interests in the general partner. As a result, plaintiffs asserted that these entities would become empty shells unless they were prevented from distributing the consideration they received in the transaction. The court held that plaintiffs have shown that at least one of their claims was colorable but plaintiffs' allegations were simply to speculative to support the required showing of irreparable harm. Accordingly, the court denied plaintiffs' motion to expedite. View "In Re K-Sea Transp. Partners L.P. Unitholders Litigation" on Justia Law

Plaintiffs, stockholders in Massey Energy Company ("Massey"), a coal mining corporation with a controversial reputation, sought a preliminary injunction against a Merger Agreement with a mining company, with a good reputation and track record for miner safety and regulatory compliance, because the Massey Board did not negotiate to have the pending "Derivative Claims" transferred into a litigation trust for the exclusive benefit of Massey stockholders. The court held that plaintiffs had not proven that the Merger's consummation presented them with a threat of irreparable harm and therefore, denied plaintiffs' motion for preliminary injunction. View "In Re Massey Energy Co. " on Justia Law

This matter involved a stockholder challenge to a merger in which a third-party strategic aquiror had agreed to merge with the target corporation for consideration valued at $35 per share. Plaintiffs moved for a preliminary injunction and requested that the court delay the target's stockholder vote and enjoin the deal protections for a period of 45-60 days so as to allow the target to seek higher bids. The court first addressed the issue of whether and in what circumstances Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc. applied when merger consideration was split roughly evenly between cash and stock. Based on its analysis, the court held that plaintiffs were likely to succeed on their argument that the approximately 50% cash and 50% stock consideration triggered Revlon. Therefore, when the board explored whether to enter into the proposed transaction, which warranted review under Revlon, its fiduciary duties required it to obtain the best value reasonably available to Smurfit-Stone stockholders. The court held, however, that plaintiffs failed to carry their burden to prove they were likely to succeed on the merits of their claims, would suffer imminent irreparable harm in injunctive relief was not granted, and were favored by the equities. Accordingly, plaintiffs' motion for a preliminary injunction was denied. View "In Re Smurfit-Stone Container Corp. Shareholder Litigation" on Justia Law