Saturday, March 5, 2011
Over at WSJ's Law Blog last wek they expressed some good natured surprise at the fact that a lawsuit has been filed in an attempt to block the NYSE - DB merger. They post a link to the complaint filed in a NY court.
Of course, it wouldn't be a merger unless there were multiple suits -- and there are. Bloomberg previously noted that two cases were filed challenging the NYSE - DB merger more than two weeks ago (Feb 16) - one each in NY and Delaware. Well, another one got filed in Delaware last week, so by my quick count there are now at least four complaints challenging this transaction.
I've read these a couple of times, and to be completely honest, there doesn't look like there is much to them. There are vague allegations of violations of fiduciary duties and onerous deal protections. Claims that the directors didn't include a go-shop in the merger agreement in violation of their fiduciary duty. I'm not sure how that is supposed to work, but whatever. Onerous deal protections? They include what looks like a standard no-shop with a fiduciary out; termination fee of 250 million Euros (on a deal worth $10 billion); and a match right. Again, it's hardly a compelling set of facts.
I can't imagine these suits will go anywhere. They are like the litigation flotsam I write about in a draft paper I've got circulating. Rather than be about vindicating shareholder rights in the face of a bad set of facts, these look more like place-holders intended to ensure that litigators keep their place in line in the "filing Olympics."