In re TD Banknorth S’holders Litig.
Vigorously Protecting Shareholders and Maximizing Recoveries
Robbins Geller obtained a $50 million settlement for the minority shareholders of TD Banknorth in connection with a going-private merger announced on April 20, 2007 in which Toronto-Dominion Bank, TD Banknorth’s majority stockholder, cashed out TD Banknorth’s public stockholders for $32.33 per share. Plaintiffs alleged that the process underlying the going-private merger was defective and was unfair to the class because Toronto-Dominion sought to buy the outstanding shares of TD Banknorth that it did not own for inadequate and unfair consideration to acquire TD Banknorth during a period of short-term weakness in its stock price. Plaintiffs alleged that defendants’ unlawful conduct in connection with the going-private merger constituted, among other things, breaches of defendants’ fiduciary duties of loyalty disclosure and a violation of a stockholders agreement entered into by Toronto-Dominion and TD Banknorth when Toronto-Dominion acquired a controlling interest in TD Banknorth during 2005.
After the announcement of Toronto-Dominion’s proposal to acquire TD Banknorth, a number of individual investors, represented by several small boutique law firms, filed complaints in Delaware Chancery Court. Robbins Geller filed suit on behalf of a plaintiff in Maine state court because TD Banknorth was headquartered in Maine. As such, two suits were proceeding at the same time – one in Delaware by the Delaware plaintiffs and the other by Robbins Geller in Maine. The Delaware plaintiffs attempted to quickly settle the case for a total of $3 million.
Meanwhile, Robbins Geller and their client aggressively litigated their case in Maine, pushed forward on expedited discovery, deposed key directors and officers of Toronto-Dominion and TD Banknorth, and obtained strong evidence in support of their claims. Armed with this evidence, Robbins Geller, on behalf of an individual investor and institutional investor City of Dearborn Heights Act 345 Police & Fire Retirement System, brought their case and legal theories to Delaware and objected to the settlement reached by the Delaware plaintiffs. The Delaware Chancery Court agreed with Robbins Geller that the settlement reached by the original Delaware plaintiffs was inadequate, rejected the settlement, and appointed Robbins Geller and their clients as lead counsel and lead plaintiffs in the Delaware action.
After contentious class certification discovery and motion activity, the court certified the class, appointed Robbins Geller’s clients as class representatives and appointed Robbins Geller as class counsel. This paved the way for Robbins Geller to continue pushing hard on fact discovery. Ultimately, after 2 years of litigation and with a trial date in sight, the defendants agreed to settle the case for $50 million, which is more than 16 times the amount shareholders would have received under the settlement proposed by the original Delaware plaintiffs. Robbins Geller’s litigation team was led by partners Samuel H. Rudman and Evan J. Kaufman.
The judge presiding over the case in Delaware described the efforts by Robbins Geller in this action as follows: “This is one of the cases – there’s probably been a half a dozen since I’ve been a judge that I handled which have – really through the sheer diligence and effort of plaintiffs’ counsel – resulted in substantial awards for plaintiffs, after overcoming serious procedural and other barriers. . . . [I]t appears plainly from the papers that you and your co-counsel have diligently, and at great personal expense and through the devotion of many thousands of hours of your time, prosecuted this case to a successful conclusion.”
The excellent result in this case showcases Robbins Geller’s dedication and ability to maximize the recovery for shareholders regardless of the legal or procedural hurdles in front of them.
In re TD Banknorth S’holders Litig., No. 2557-VCL (Del. Ch.).