Merger Unfairness

We regularly represent investors in public companies who become victims of management-led buyouts at an unfair price. In transactions also involving unfair dealing and breach of fiduciary duties by the Board of Directors, we will seek injunctive relief and damages. Where price fairness is the only issue, we will pursue a statutory appraisal remedy on behalf of our institutional clients. We have been spectacularly successful in both types of cases – both in the Delaware Chancery Court and in other jurisdictions.

For example:

Our firm represented three mutual funds advised by Federated Investors, Inc. as co-lead plaintiffs in a class action brought in the Delaware Court of Chancery, In re ACS Shareholders Litigation, Cons. C.A . No. 4940-VCP (Del. Ch. 2010), on the eve of trial, the Lowey firm and our co-lead counsel achieved a $69 million increase in the merger consideration being paid to the shareholders of Affiliated Computer Services, Inc. by Xerox Corporation.
The Lowey firm acted as co-lead counsel for a class of seatholders seeking to enjoin the merger between the New York Stock Exchange and Archipelago Holdings, Inc. As a result of the action, the merger terms were revised, providing the seatholders with more than $250 million in additional consideration. In addition, the NYSE agreed to retain an independent financial adviser to report to the Court as to the fairness of the deal to the NYSE seatholders. Plaintiffs also provided the Court with their expert’s analysis of the new independent financial adviser’s report. Both reports were provided to the seatholders prior to the merger vote. The Court noted that “these competing presentations provide a fair and balanced view of the proposed merger and present the NYSE Seatholders with an opportunity to exercise their own business judgment with eyes wide open. The presentation of such differing viewpoints ensures transparency and complete disclosure.” In re New York Stock Exchange/Archipelago Merger Litigation, (N.Y. Sup. Ct. December 5, 2005).
In United Food and Commercial Workers Union, etc. v. Joseph Neubauer, No. 002940, (Philadelphia County Court of Common Pleas 2006), the Lowey Firm beat back motions to dismiss and achieved a $242.6 million increase in merger consideration for the public stockholders of Aramark Corporation, in collaboration with the Special Committee.
Following a three-day bench trial in a statutory appraisal proceeding, the Delaware Chancery Court awarded our clients, an institutional investor and investment advisor, $30.43 per share plus compounded prejudgment interest, for a transaction in which the public shareholders who did not seek appraisal were cashed out at $28 per share. Doft & Co. v. Travelocity.com, Inc., No. Civ. A. 19734, 2004 WL 1152338 (May 20, 2004), modified, 2004 WL 1366994 (Del. Ch. June 10, 2004).
The Lowey firm, as Co-Lead Counsel on behalf of an institutional investor, obtained an injunction from the Delaware Supreme Court, enjoining a proposed merger between NCS Healthcare, Inc. and Genesis Health Ventures, Inc., accepting our argument that the NCS board had breached its fiduciary obligations by agreeing to irrevocable merger lock-up provisions. As a result of the injunction, the NCS shareholders were able to obtain the benefit of a competing takeover proposal by Omnicare, Inc. of 300% more than that offered in the enjoined transaction, providing NCS’s shareholders with an additional $99 million. Omnicare, Inc. v. NCS Healthcare, Inc., 818 A.2d 914 (Del. 2003).
On the eve of the scheduled hearing of a preliminary injunction motion, we and co-lead counsel achieved a $200 million increase in the consideration paid to shareholders in an acquisition by a private equity firm. In re Seagate Technology, Inc. Shareholders Litigation, CA No. 17932 (Del. Ch. 2001).

	Stephen Lowey is the chairman and co-founder of the firm. He heads the firm's complex litigation practice. He is involved in all the firm's practice areas, but primarily handles investor litigation and prescription overcharge litigation. Read more >>
	Thomas Skelton is a partner of the firm and specializes in complex litigation, with a primary emphasis on securities fraud, merger litigation, corporate governance and statutory appraisal cases. Mr. Skelton also represents clients in arbitrations before the Financial Industry Regulatory Authority (FINRA). Read more >>