Corporate Takeover

the cream of the crop of class action business law and mergers and acquisition litigators

Justice Ira B. Warshawsky, In re Aeroflex, Inc. Shareholder Litigation

Robbins Geller has earned a reputation as the leading law firm in representing shareholders in corporate takeover litigation. Through its aggressive efforts in prosecuting corporate takeovers, the Firm has secured billions of dollars and beneficial changes on behalf of shareholders in the context of mergers and acquisitions.

The Firm regularly prosecutes merger and acquisition cases post-merger, often through trial, to maximize the benefit for its shareholder class.  Some of these cases include:

• In re Kinder Morgan, Inc. S’holders Litig., No. 06-C-801 (Kan. Dist. Ct., Shawnee Cnty.). In one of the largest recoveries ever in corporate takeover class action litigation, Robbins Geller negotiated a settlement fund of $200 million in 2010 following years of post-close litigation in connection with the management buyout of Kinder Morgan, Inc.
• Chabot v. Walgreens Boots Alliance, Inc., No. 1:18-cv-02118-JPW (M.D. Pa.). Robbins Geller secured a $192.5 million recovery in a case involving the attempted merger of Walgreens and Rite Aid. The plaintiffs alleged that Walgreens made public statements misrepresenting the increasing risks of an FTC review of the merger between Walgreens and Rite Aid, which harmed Rite Aid investors when the truth became known and Rite Aid’s stock price plummeted. At the time of settlement, this recovery was the largest securities class action recovery in the Middle District of Pennsylvania and the second-largest such recovery in any Pennsylvania federal court.
• In re Dole Food Co., Inc. S’holder Litig., No. 8703-VCL (Del. Ch.). Robbins Geller and co-counsel went to trial in the Delaware Court of Chancery on claims of breach of fiduciary duty on behalf of Dole Food Co., Inc. shareholders. The litigation challenged the 2013 buyout of Dole by its billionaire Chief Executive Officer and Chairman, David H. Murdock. On August 27, 2015, the court issued a post-trial ruling that Murdock and fellow director C. Michael Carter – who also served as Dole’s General Counsel, Chief Operating Officer, and Murdock’s top lieutenant – had engaged in fraud and other misconduct in connection with the buyout and are liable to Dole’s former stockholders for over $148 million, the largest trial verdict ever in a class action challenging a merger transaction. 

• Nieman v. Duke Energy Corp., No. 3:12-cv-00456 (W.D.N.C.). Robbins Geller, along with co-counsel, obtained a $146.25 million settlement on behalf of Duke Energy Corporation investors. The settlement resolves accusations that defendants misled investors regarding Duke’s future leadership following its merger with Progress Energy, Inc., and specifically, their premeditated coup to oust William D. Johnson (CEO of Progress) and replace him with Duke’s then-CEO, John Rogers. This historic settlement represented the largest recovery ever in a North Carolina securities fraud action, and one of the five largest recoveries in the Fourth Circuit.

• Goldstein v. Denner (Bioverativ), C.A. No. 2020-1061-JTL (Del. Ch.). Robbins Geller and co-counsel secured $124 million for Bioverativ, Inc. shareholders in litigation challenging the company’s sale to Sanofi S.A., in one of the largest recoveries ever on a challenge to a third-party, arm’s-length M&A transaction. The Firm settled claims challenging the sale process and disclosures in exchange for a payment of $84 million, and then, just one week before trial was set to begin, settled claims alleging that corporate insiders had engaged in illicit insider trading in advance of the sale, for another $40 million. The $40 million recovery is the first time shareholders have directly obtained a recovery based on insider trading under Delaware law.

• In re Rural Metro Corp. S’holders Litig., No. 6350-VCL (Del. Ch.). Robbins Geller and co-counsel were appointed lead counsel in this case after successfully objecting to an inadequate settlement that did not take into account evidence of defendants’ conflicts of interest. In a post-trial opinion, Delaware Vice Chancellor J. Travis Laster found defendant RBC Capital Markets, LLC liable for aiding and abetting Rural/Metro’s board of directors’ fiduciary duty breaches in the $438 million buyout of Rural/Metro, citing “the magnitude of the conflict between RBC’s claims and the evidence.” RBC was ordered to pay nearly $100 million as a result of its wrongdoing, the largest damage award ever obtained against a bank over its role as a merger adviser. The Delaware Supreme Court issued a landmark opinion affirming the near $100 million judgment for shareholders, resulting in an overall recovery of almost $110 million, on November 30, 2015. RBC Cap. Mkts., LLC v. Jervis, 129 A.3d 816 (Del. 2015). 

• In re Del Monte Foods Co. S’holders Litig., No. 6027-VCL (Del. Ch.). Robbins Geller exposed the unseemly practice by investment bankers of participating on both sides of large merger and acquisition transactions and ultimately secured an $89 million settlement for shareholders of Del Monte.  For efforts in achieving these results, the Firm’s lawyers prosecuting the case were named Attorneys of the Year by California Lawyer magazine in 2012.

• Murray v. EarthLink Holdings Corp., No. 4:18-c-v-00202-JM (E.D. Ark.). After six years of litigation challenging the merger between EarthLink and Windstream, Robbins Geller secured an $85 million recovery in a securities class action case against EarthLink, Windstream, and certain former officers and directors of both companies. The case resolved as it approached a three-week jury trial in federal court in Arkansas. The litigation survived Windstream’s bankruptcy reorganization, which occurred during the litigation.  As a result of defendants’ misleading statements, as the complaint alleges, EarthLink stockholders voted in favor of the merger, and they received Windstream stock in exchange for their EarthLink shares. Not long after the merger, Windstream’s stock price began plummeting. Just two years after the merger, Windstream filed for Chapter 11 bankruptcy.
• In re Tesla Motors, Inc. S’holder Litig., No. 12711-VCS (Del. Ch.). Robbins Geller, along with co-counsel, secured a $60 million partial settlement after nearly four years of litigation against Tesla. This partial settlement is one of the largest derivative recoveries in a stockholder action challenging a merger. This partial settlement resolves the claims brought against defendants Kimbal Musk, Antonio J. Gracias, Stephen T. Jurvetson, Brad W. Buss, Ira Ehrenpreis, and Robyn M. Denholm, but not the claims against defendant Elon Musk.
• In re Good Technology Corp. S’holder Litig., C.A. No. 11580-VCL (Del. Ch.). Robbins Geller and co-counsel secured a $52 million recovery for common stockholders of privately held company Good Technology in a challenge to Good’s acquisition by BlackBerry Limited. The case was the subject of a New York Times profile describing the conflicts of interest facing senior executives and venture-capitalist directors with different return profiles from common stockholders (“When a Unicorn Start-Up Stumbles, Its Employees Get Hurt”). The recovery, agreed to less than two weeks before trial was scheduled to begin, reflected a 140% increase over the less than $37 million paid to common stockholders at closing of the acquisition.
• In re TD Banknorth S’holders Litig., No. 2557-VCL (Del. Ch.). After objecting to a modest recovery of just a few cents per share, Robbins Geller took over the litigation and obtained a common fund settlement of $50 million.

• In re Chaparral Res., Inc. S’holders Litig., No. 2633-VCL (Del. Ch.). After a full trial and a subsequent mediation before the Delaware Chancellor, the Firm obtained a common fund settlement of $41 million (or 45% increase above merger price) for both class and appraisal claims.

• Laborers’ Local #231 Pension Fund v. Websense, Inc., No. 37-2013-00050879-CU-BT-CTL (Cal. Super. Ct., San Diego Cnty.). Robbins Geller successfully obtained a record-breaking $40 million in Websense, which is believed to be the largest post-merger common fund settlement in California state court history. The class action challenged the May 2013 buyout of Websense by Vista Equity Partners (and affiliates) for $24.75 per share and alleged breach of fiduciary duty against the former Websense board of directors, and aiding and abetting against Websense’s financial advisor, Merrill Lynch, Pierce, Fenner & Smith, Inc. Claims were pursued by the plaintiff in both California state court and the Delaware Court of Chancery.
• In re Onyx Pharms., Inc. S’holder Litig., No. CIV523789 (Cal. Super. Ct., San Mateo Cnty.). Robbins Geller obtained $30 million in a case against the former Onyx board of directors for breaching its fiduciary duties in connection with the acquisition of Onyx by Amgen Inc. for $125 per share at the expense of shareholders. At the time of the settlement, it was believed to set the record for the largest post-merger common fund settlement in California state court history. Over the case’s three years, Robbins Geller defeated defendants’ motions to dismiss, obtained class certification, took over 20 depositions, and reviewed over one million pages of documents. Further, the settlement was reached just days before a hearing on defendants’ motion for summary judgment was set to take place, and the result is now believed to be the second largest post-merger common fund settlement in California state court history.
• Gordon v. Harrah’s Entertainment, Inc., No. A529183 (Nev. Dist. Ct., Clark Cnty.). Robbins Geller’s active prosecution of the case on several fronts, both in federal and state court, assisted Harrah’s shareholders in securing an additional $1.65 billion in merger consideration.
• In re Chiron S’holder Deal Litig., No. RG 05-230567 (Cal. Super. Ct., Alameda Cnty.). The Firm’s efforts helped to obtain an additional $800 million in increased merger consideration for Chiron shareholders.
• In re Dollar Gen. Corp. S’holder Litig., No. 07MD-1 (Tenn. Cir. Ct., Davidson Cnty.). As lead counsel, the Firm secured a recovery of up to $57 million in cash for former Dollar General shareholders on the eve of trial.
• In re Prime Hosp., Inc. S’holders Litig., No. 652-N (Del. Ch.). Robbins Geller objected to a settlement that was unfair to the class and proceeded to litigate breach of fiduciary duty issues involving a sale of hotels to a private equity firm.  The litigation yielded a common fund of $25 million for shareholders.