M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Friday, June 1, 2012

HGS pill suit fails to get TRO

Plaintiffs in the Maryland suit against the HGS board yesterday failed in their bid to get a order to force the board of HGS to pull the pill they put in place last month:

A Montgomery County Circuit Court judge shot down an HGS shareholder’s request for a temporary restraining order to invalidate the “poison pill” the Rockville biotech enacted last month to make it a less attractive acquisition target.

The biotech was sued by shareholder Duane Howell of Baltimore, who claims its management is cheating him, other stockholders and the company itself by rejecting GlaxoSmithKline’s $2.6 billion offer in April, and then instituting the shareholder rights plan, or poison pill. ...

Judge Michael D. Mason said Thursday that HGS had properly accounted for its actions with its shareholders when it issued the poison pill May 16.

No surprise here, I suppose.  The bigger surprise would have been if the Maryland judge had ignored both Delaware and Maryland law and order the pill pulled. Odd though, Bloomberg reports that the judge in this case qas concerned that only one shareholder, the litigant, was complaining:

After a hearing on Thursday, Montgomery County Circuit Court Judge Michael Mason denied Howell's request, saying only one shareholder had sued the company, according to a report by Bloomberg News.

"This is not a case where a number of disgruntled shareholders have come to court up in arms," the judge said in court, according to the report.

Even under Maryland law, the number of plaintiffs shouldn't matter to the result.  Hmm.

-bjmq

http://lawprofessors.typepad.com/mergers/2012/06/hgs-pill-suit-fails.html

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