$29 Million Obtained for Gardner Denver Shareholders
Robbins Geller, as court-appointed lead counsel, has reached a $29 million settlement to resolve claims brought on behalf of the former public shareholders of Gardner Denver, Inc. arising out of the sale of Gardner Denver to Kohlberg Kravis Roberts & Co. L.P. (“KKR”) for $76 per share. The lawsuit alleged that Gardner Denver’s former board of directors breached its fiduciary duties to the shareholders in the sale and that KKR aided and abetted the board’s misconduct. The lawsuit sought damages against the board and KKR, alleging that the $76 per share price paid by KKR undervalued Gardner Denver.
Through aggressive pursuit of the lawsuit, Robbins Geller obtained and utilized deposition testimony, email communication, and other evidence from key witnesses and entities. The lawsuit focused on the fact that KKR hired the recently resigned CEO of Gardner Denver as a consultant for the purchase of Gardner Denver. The lawsuit alleged that the former CEO breached his confidentiality agreement with Gardner Denver in providing advice to KKR, which gave KKR the ability to exploit Gardner Denver and gain unlawful advantages over other potential bidders in the ensuing corporate sales process. Coupled with leaks to the press during the process and the board’s lack of proper involvement and oversight, the lawsuit alleged that the sale of Gardner Denver was skewed in favor of KKR to the detriment of Gardner Denver’s shareholders.
Robbins Geller achieved the $29 million settlement after two days of mediation and prior to an adjudication of the defendants’ impending request to dismiss the operative complaint. The Wall Street Journal Online noted that the settlement was a “rare monetary payout in litigation challenging mergers” and “represents an effective price increase of about 59 cents a share.” Law360 stated that the settlement “serves as a cautionary tale for other private equity firms looking to take on former insiders as deal consultants.” Reuters quoted Robbins Geller attorney Randall J. Baron as stating that the $29 million settlement was “a very good result for shareholders in what would have been a very challenging case.”
Vice Chancellor John W. Noble of the Delaware Chancery Court will consider final approval of the settlement at a hearing scheduled for September 3, 2014.
In re Gardner Denver, Inc. S’holder Litig., No. 8505-VCN (Del. Ch.).