Robbins Geller Defeats Motion to Dismiss in Harman Class Action
On October 3, 2019, the Honorable Robert N. Chatigny of the United States District Court for the District of Connecticut partly denied defendants’ motion to dismiss in Baum v. Harman International Industries, Incorporated.
Harman designs and engineers connected products and solutions for automakers, consumers, and enterprises worldwide, including connected car systems, audio and visual products, enterprise automation solutions, and connected services. The case alleges that Harman and its Board of Directors violated the Securities Exchange Act of 1934 in connection with Harman’s proxy statement issued to stockholders regarding the approximately $8 billion acquisition of Harman by Samsung Electronics Co., Ltd.
In denying defendants’ motion to dismiss, the court ruled that the plaintiff “sufficiently allege[d] that the proxy was misleading as to the reason that Harman revised its financial projections and as to a potential conflict of interest on the part of a financial advisor. Additionally, plaintiff has adequately pled loss causation by asserting that Harman shareholders did not receive adequate compensation in the acquisition. . . . [P]laintiff alleges that the defendants harbored an economic incentive to make the acquisition look more attractive.”
Baum v. Harman International Industries, Incorporated, et al., No. 3:17-cv-00246, Ruling and Order (D. Conn. Oct. 3, 2019).