LASTER, Vice Chancellor.
The plaintiffs own an undisclosed number of shares of Sauer-Danfoss Inc. ("Sauer-Danfoss" or the "Company"). They filed suit hours after Danfoss A/S, the Company's controlling stockholder, announced a plan to launch a tender offer for the Sauer-Danfoss minority shares. After filing, the plaintiffs did not actually litigate. Instead, their counsel tried to set up a disclosure-only settlement. For disputed reasons, talks broke down. After the plaintiffs amended their complaint to assert that the defendants failed to disclose the supplemental details contemplated by the abandoned settlement, Danfoss and the Company voluntarily disclosed the information. Danfoss later withdrew its tender offer, mooting the litigation. The plaintiffs' law firms now seek an award of $750,000, ostensibly for conferring a corporate benefit in the form of supplemental disclosures. The defendants argue against any award.
With one exception, the twelve disclosures in question would not have provided consideration for a settlement and will not support a fee award. One of the disclosures was made at a time when the plaintiffs had not yet asserted a disclosure claim, much less a claim that was meritorious when filed. Ten disclosures were not material, conferred no benefit on stockholders, and will not support a fee. That leaves one: a disclosure correcting an errant description of the 52-week high and related measuring period for the trading price of the Company's common stock. For that disclosure, I award $75,000.
The facts are drawn from the record presented in connection with the fee dispute. Because the plaintiffs never engaged in meaningful litigation activity, the record is sparse. It consists primarily of the public disclosures filed by Danfoss and the Company.
Danfoss is one of the largest industrial companies in Denmark. Directly or through affiliates, Danfoss controls approximately 75.7% of the outstanding common stock of Sauci-Danfoss, a Delaware corporation. Sauer-Danfoss is a worldwide leader in the design, manufacture and sale of engineered hydraulic, electric and electronic systems and components for use primarily in applications of mobile equipment.
On December 22, 2009, Danfoss announced its intention to launch a tender offer during the first week of January 2010 for the outstanding shares of Sauer-Danfoss common stock that Danfoss did not already own. The contemplated offer
In response, Sauer-Danfoss issued a statement confirming that it had received notice of Danfoss's intent to launch a tender offer. The statement noted that although no tender offer had yet been launched, the Sauer-Danfoss board of directors had empowered a special committee of non-management, independent directors (the "Special Committee") to consider any tender offer that might be made and to determine how to respond. Sauer-Danfoss also announced that the Special Committee had retained Kirkland & Ellis LLP as its independent legal counsel.
Several familiar entrepreneurial law firms quickly filed lawsuits in response to the announcements. On December 23, 2009, the day after the announcements, the first putative class action was filed in this Court. Half an hour later, a substantively identical putative class action was filed in Iowa state court. See Friese v. Sauer-Danfoss Inc., et al., No. LACV45714 (Story Cty. Dist. Ct.) (the "Iowa Action"). An hour and a half after that, a second putative class action was filed in this Court. Each of the quickly filed complaints alleged that the price in the yet-to-made tender offer was inadequate, that Danfoss had breached its fiduciary duties by announcing its intention to proceed with a tender offer, and that the directors on the Sauer-Danfoss board breached their fiduciary duties by responding to the not-yet-commenced offer. The complaints elided over the temporal difficulties inherent in challenging future events.
After filing suit, the plaintiffs did not seek any relief or otherwise try to litigate. Instead, they waited for a transactional development that might provide a basis for settlement.
Meanwhile, on January 8, 2010, Danfoss announced that it was delaying the formal launch of its tender offer pending further discussions with the Special Committee. That same day, the Delaware plaintiffs sent a letter to the Special Committee. The letter stated that based on the analysis of their financial expert, the Delaware plaintiffs believed that $10.10 per share was inadequate. Counsel asked to meet with the Special Committee and its representatives to discuss the offer. The Special Committee did not respond.
On January 15, 2010, Danfoss announced that it was further delaying the tender offer pending additional discussions with the Special Committee. On February 3, the Iowa plaintiffs sent a letter of their own to the Special Committee asserting that the proposed price was inadequate. On February 4, the Delaware plaintiffs sent the Special Committee a second letter reiterating their views on price and again requesting a meeting. The Special Committee did not respond to either letter.
Between February 16 and 24, 2010, Sauer-Danfoss senior management prepared updated internal projections that reflected the Company's strong results in January and suggested better-than-expected sales and earnings for 2010. Senior management provided the projections to the Special Committee on February 24, 2010. With the new projections in hand, the Special Committee pushed Danfoss for a higher price.
On March 9, 2010, Danfoss announced that it would launch a tender offer at $13.25 per share. Danfoss filed its Schedule TO on March 10. That document disclosed that Danfoss initially contemplated offering $10.10 per share but agreed to increase the price after discussions with the Special Committee. In turn, after consulting with its financial advisor, Lazard Frères & Co. ("Lazard"), the Special Committee agreed to recommend in favor of the higher price. The offer was conditioned on tenders from (i) a majority of the minority shares and (ii) sufficient shares to give Danfoss ownership of at least 90% of the outstanding stock. The majority-of-the-minority condition was non-waivable.
On March 19, 2010, Sauer-Danfoss filed its Schedule 14D-9. The board recommended in favor of the $13.25 per share offer. Also on March 19, Sauer-Danfoss filed a Schedule 13E-3 attaching the banker's book prepared by Lazard.
Around March 15, 2010, the parties began discussing settlement. They entered into a confidentiality agreement, and the defendants agreed to produce some 2,000 pages of non-public documents. The package included the standard categories of documents that defendants routinely produce to facilitate a disclosure-only settlement: minutes; financial presentations; and communications between the Special Committee and Danfoss. The plaintiffs never filed any document requests or interrogatories, never took any depositions, and never engaged in anything resembling traditional, adversarial discovery. The transmittal and receipt of the standard package marked the only "discovery" that took place in the litigation.
On March 25, 2010, during settlement discussions, the Iowa plaintiffs wrote to Danfoss and identified purported disclosure violations in the tender offer documents. At the time, none of the plaintiffs had amended the complaints they hastily filed on December 23. None of the as-filed complaints actually asserted a disclosure claim.
Among other things, the March 25 letter demanded that Sauer-Danfoss disclose: "with respect to Lazard's Selected Comparable Companies analysis, ... the selection criteria for Lazard's choice of public company comparables, including the basis for inclusion of [the] Company's customers and Mid-Cap industrials." Long Letter, Ex. 4, at 2. On the same day, Sauer-Danfoss received a letter from the Securities and Exchange Commission requesting a similar disclosure.
On March 31, 2010, Sauer-Danfoss filed a supplemental disclosure that stated the following:
Amendment No. 1 to Sauer-Danfoss Schedule 14D-9, at 3-4.
Settlement discussions continued through April 3, 2010. The parties disagree about whether they reached an agreement in principle on eleven additional supplemental disclosures to resolve the action. It is undisputed that the defendants provided drafts of the proposed disclosures to the plaintiffs, who responded with comments. The defendants say they had a deal, but the plaintiffs reneged when the defendants would not meet their fee demand. The plaintiffs say only that talks broke down.
On April 1, 2010, the Delaware plaintiffs filed a verified amended and consolidated class action complaint (the "Amended Complaint"). The Amended Complaint alleged for the first time that the defendants breached their duty of disclosure in connection with the transaction. In substance, the Amended Complaint identified twenty-eight purported disclosure violations, including the eleven matters that had been the subject of settlement discussions. The Amended Complaint dropped the plaintiffs' prior claim that the tender offer price was inadequate.
On April 1, 2010, Mason Capital Management LLC ("Mason Capital") issued a press release announcing that "it [did] not intend to tender its shares" because it believed the price was inadequate. App. to Defs.' Ans. Br., Ex. G. Mason Capital owned 1.94 million shares, representing 17% of the public float and making it the largest single minority shareholder.
On April 5, 2010, Danfoss filed a further amendment to its Schedule TO. On April 5 and 6, 2010, Sauer-Danfoss twice amended its Schedule 14D-9. The amendments disclosed the eleven items that the parties had discussed as part of a potential settlement. I discuss the specific items below. See Part II.A.2.b, infra.
On April 7, 2010, Mason Capital issued a press release suggesting that Sauer-Danfoss's business was improving and warranted a higher price. The firm reiterated its decision not to tender. The press release also stated that the supplemental disclosures in the amended Schedule TO and Schedule 14D-9 "only strengthened its view that the current offer of $13.25 per share materially undervalues [Sauer-Danfoss]." App. to Defs.' Ans. Br., Ex. J.
On April 9, 2010, Danfoss increased the tender offer price to $14.00 per share, saying that this was its "best and final offer price." Danfoss explained that it had decided to increase the offering price after discussions with the Special Committee and Mason Capital. Danfoss extended the tender offer to April 29, 2010.
On April 15, 2010, Sauer-Danfoss management informed the Special Committee that preliminary first-quarter financial results were stronger than expected. Management also informed the Special Committee that it had again preliminarily increased its sales forecast for the year and was evaluating further increases to its EBITDA and EBIT forecasts. The Company issued a press release announcing the information and advised stockholders not to rely on the Special Committee's prior recommendation. The next day, Sauer-Danfoss issued a press release
On April 22, 2010, the plaintiffs moved to file a second amended complaint (the "Second Amended Complaint"). With their disclosure claims mooted, the plaintiffs resurrected their previously abandoned price-inadequacy claim. I granted the motion, and the Second Amended Complaint was formally filed on May 3, 2010.
On April 23, 2010, the Special Committee withdrew its recommendation in favor of the offer and recommended that the shareholders reject the $14.00 price. On April 25, the Special Committee told Danfoss they could support a price of $21.50 per share. Danfoss declined to increase its offer. On April 29, the tender offer closed with only 20% of the minority shares tendered. The offer failed to satisfy the majority-of-the-minority condition, and Danfoss did not acquire any shares.
By order dated May 13, 2010, I dismissed the Delaware action as moot but retained jurisdiction to consider any fee application the plaintiffs might make. The dismissal order permitted the plaintiffs in the Iowa suit, if they desired, to file an application with this Court. Commendably, the Iowa plaintiffs dismissed their suit, and on June 11, they joined the Delaware plaintiffs in making a joint fee application. By doing so, they responsibly avoided forcing two courts to expend judicial resources addressing an identical issue and saved the stockholders whom they purported to represent the cost of having their corporation pay for defense counsel to oppose two fee applications.
When a plaintiff pursues a cause of action relating to the internal affairs of a Delaware corporation and generates benefits for the corporation or its stockholders, Delaware law calls for the plaintiff to receive an award of attorneys' fees and expenses determined based on the factors set forth in Sugarland Industries, Inc. v. Thomas, 420 A.2d 142 (Del.1980). The stockholder need not have sued in a representative capacity, and the Court need not have certified a class. Tandycrafts, Inc. v. Initio P'rs, 562 A.2d 1162, 1165 (Del.1989). Likewise, the benefit need not have resulted from a litigated judgment or settlement. Rosenthal v. Burry Biscuit Corp., 209 A.2d 459, 460 (Del.Ch.1949) (Seitz, V.C.). If the defendants take action to moot the dispute, then the plaintiff can seek an award. Allied Artists Pictures Corp. v. Baron, 413 A.2d 876, 878 (Del. 1980); Burry Biscuit, 209 A.2d at 460. To obtain a fee in a mooted case, the plaintiff must show that "(1) the suit was meritorious when filed; (2) the action producing benefit to the corporation was taken by the defendants before a judicial resolution was achieved; and (3) the resulting corporate benefit was causally related to the lawsuit." United Vanguard Fund, Inc. v. TakeCare, Inc., 693 A.2d 1076, 1079 (Del. 1997).
Over four decades ago, the Delaware Supreme Court established the test for determining whether a suit is "meritorious when filed." Chrysler Corp. v. Dann, 223 A.2d 384, 387 (Del.1966).
Id. The complaint cannot have been "a series of unjustified and unprovable charges of wrongdoing to the disadvantage of the corporation." Id. Instead, "[t]he plaintiff must have some factual basis at least for the making of the charges. If there is none, then the conclusion follows that the action lacked merit and the plaintiff is entitled to no allowance for fees." Id.
Fourteen years after Dann, the Delaware Supreme Court was asked to revisit the meritorious-when-filed test. In Allied Artists, the Delaware Supreme Court rejected the contention that in a settled or mooted case, "it should not matter whether the suit had legal merit," so long as the action resulted in some benefit to stockholders. Allied Artists, 413 A.2d at 879. The court reasoned that such a rule would contradict Delaware's public policy of "discouraging baseless litigation." Id. Since then, the Delaware Supreme Court has adhered consistently to the "meritorious when filed" test.
Fixating on the words "when filed," the defendants argue that the plaintiffs cannot receive a fee award because the only benefits achieved by the case were supplemental disclosures, and the complaints that quickly appeared on December 23, 2009, were premature, unripe, and did not assert disclosure claims. I need not consider whether the substantive challenges to the tender offer were ripe under In re Cox Communications, Inc. Shareholders Litigation, 879 A.2d 604 (Del.Ch.2005), because the plaintiffs do not claim to have achieved any benefits as a result of those claims. The plaintiffs take credit only for obtaining supplemental disclosures.
The defendants are therefore technically correct that the December complaints did not assert any claim that was meritorious when filed and which led causally to benefits for the Sauer-Danfoss stockholders. I disagree, however, that a court awarding fees under Delaware law must look only to the original complaint. As authority, the defendants rely on Allied Artists, which held that "the meritoriousness determination should be made with reference to the state of the action at the time of filing." 413 A.2d at 879. The issue in Allied Artists was whether the plaintiff's loss on a motion for summary judgment precluded a finding that the action was meritorious when filed, not whether a court should look to the initial complaint or to an amended complaint to make that determination. The Allied Artists Court followed Dann in holding that the test for meritoriousness was whether the complaint could withstand a motion to dismiss, not whether the plaintiff later lost on summary judgment. Id. The Allied Artists Court did not hold that the pleadings-based analysis must turn on the original complaint.
Contrary to the defendants' reading of Allied Artists, this Court has looked to the complaint that raised the claims conferring the alleged benefit to evaluate whether the suit was meritorious when filed, particularly when the predicate facts have evolved since the initial complaint.
Allied Artists did not lock plaintiffs into their original complaint for purposes of a
Here, because the benefits obtained were additional disclosures, the meritorious-when-filed analysis turns on the Amended Complaint. I need not consider the Second Amended Complaint, which was filed after the defendants made their supplemental disclosures and which did not assert any further disclosure claims.
The plaintiffs first claim credit for disclosures about Lazard's analysis that Sauer-Danfoss made on March 31, 2010, before the filing of the Amended Complaint. Sauer-Danfoss issued its original Schedule 14D-9 on March 19. On March 25, the Iowa plaintiffs wrote to Sauer-Danfoss and identified what they felt were material omissions from the Schedule 14D-9. Among other things, the Iowa plaintiffs demanded disclosure of "the selection criteria for Lazard's choice of public company comparables, including the basis for inclusion of [the] Company's customers and Mid-Cap industrials." Long Letter, Ex. 4. On the same day, Special Counsel from the SEC's Office of Mergers & Acquisitions wrote Sauer-Danfoss with the following request about Lazard's comparable companies analysis:
Supp.App. to Defs.' Sur-Reply Br., Ex. S ¶ 10. On March 31, 2010, Sauer-Danfoss filed Amendment No. 1 to its Schedule 14D-9, disclosing the criteria Lazard used in selecting the public company comparables and how those criteria were applied. The plaintiffs claim credit for the disclosure. The defendants say that they made the disclosure in response to the SEC's comment letter.
When the Iowa plaintiffs sent the March 25 letter, none of the plaintiffs had asserted a disclosure claim. There was therefore no disclosure claim on file at the time of the March 25 letter that could support a fee award. The Delaware plaintiffs did not assert disclosure claims until they filed the Amended Complaint on April 1, 2010, and the Iowa plaintiffs never did. Because the plaintiffs had not yet filed a complaint asserting a meritorious disclosure claim, they cannot be awarded fees for the March 31 disclosures. Cf. Dann, 223 A.2d at 387.
Because the plaintiffs had not yet filed a claim, I need not consider whether, after a pleading asserting meritorious disclosure claims has been filed, a letter raising additional disclosure issues would be sufficient to support a mootness fee award. In the context of expedited litigation and on-going discovery, the law might not require
The plaintiffs next claim credit for eleven supplemental disclosures that the plaintiffs sought in the Amended Complaint and which the defendants made on April 5 and 6. For a disclosure claim to be meritorious when filed and provide a compensable benefit to stockholders, the supplemental disclosure that was sought and obtained must be material. Cf. Campbell v. The Talbots, Inc., 5199-VCS, at 19-35 (Del. Ch. Dec. 20, 2010) (TRANSCRIPT) (analyzing value of disclosures in settlement based on their materiality). Conversely, if a complaint does not identify a material misstatement or omission, it cannot survive a motion to dismiss and therefore is not meritorious. Compare Khanna v. McMinn, 2006 WL 1388744, at *29 (Del. Ch. May 9, 2006) (holding that disclosure claim may be dismissed for failure to plead materiality if court "is satisfied with reasonable certainty that no set of facts could be proved that would permit the plaintiffs to obtain relief under the allegations made"), with Dann, 223 A.2d at 387 ("A claim is meritorious ... if it can withstand a motion to dismiss...."). Under Delaware law, as under federal law, the materiality standard requires "a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable
I address each of the eleven disclosures in turn. With one exception, none was material. Before considering the disclosures individually, I address two arguments advanced by the plaintiffs in an effort to avoid a disclosure-by-disclosure analysis.
First, the plaintiffs assert that because the defendants decided to make the supplemental disclosures and moot those aspects of the Amended Complaint, the information must have been material. Pls.' Opening Br. at 19-20. If subsequent mooting supported an inference of merit, then the meritorious-when-filed inquiry would become redundant in a mootness case, where by definition the defendants have mooted the plaintiff's claims. In Allied Artists, the Delaware Supreme Court held that a plaintiff still must meet the meritorious-when-filed element, even in a mooted case, because of its "concern[] with discouraging baseless litigation." Allied Artists, 413 A.2d at 879.
Second, the plaintiffs contend that I need not delve into the materiality of the supplemental disclosures because Mason Capital allegedly "made its decision not to tender based primarily on information disclosed directly as a result of Plaintiffs' efforts." Pls.' Reply Br. 10. The plaintiffs point out that Mason Capital announced it would not tender after the defendants made the first supplemental disclosures, and that Mason Capital responded to the next batch of supplemental disclosures by issuing a press release stating that the additional disclosures "strengthened its view that the current offer of $13.25 materially undervalue[d] [Sauer-Danfoss]." App. to Defs.' Ans. Br., Ex. J.
Mason Capital's press releases do not confer blanket materiality on the eleven supplemental disclosures. As a threshold matter, Delaware's plaintiff-friendly presumption that action results from counsel's efforts does not apply to Mason Capital. The presumption applies only to actions taken by the defendants. Cf. Alaska Elec., 988 A.2d at 417 (explaining that presumption of causation applies "[w]here ... a defendant takes action subsequent to the complaint that renders the claims asserted moot" (emphasis added)). The plaintiffs are therefore not entitled to a presumption that Mason Capital did not tender because of the supplemental disclosures.
Nor can I rely blindly on Mason Capital's public statements. Mason Capital is a hedge fund. If nothing else, hedge funds are rational profit maximizers. Hedge funds write letters and issue press releases to serve their own interests. Mason Capital made its disclosures because it opposed the transaction and self-interestedly wanted to block the deal, not to express an unbiased view on the materiality of the supplemental disclosures. The Mason Capital press releases are nice atmospheric factors for the plaintiffs, but they do not replace this Court's obligation to assess materiality independently.
Because the plaintiffs' blanket arguments do not relieve this Court of its obligation to determine whether the disclosure claims were meritorious when filed, I must review the eleven allegedly beneficial items. Only one was material.
Schedule TO, Ex. (A)(1)(I) (hereinafter "Offer to Purchase"), at 22. According to the Amended Complaint, this statement did not define the 52-week period for which $9.75 was the purported high price and provided inaccurate pricing information, because prior to January 20, 2010, the 52-week high closing price was $12.49 on January 19, 2010. Compl. ¶ 55(b). On April 5, 2010, Danfoss disclosed the following:
Amendment No. 3 to Danfoss Schedule TO, at 7. The plaintiffs claim credit for fixing what they say was inaccurate information.
Danfoss's original disclosure was vague about the end date for the 52-week period during which the high occurred at $12.70 on January 20, 2010. A reader would infer that the end date approximated the date of the Schedule TO, which was issued on March 10. The original disclosure then explained that this price was achieved after the public announcement of the planned tender offer, suggesting that anticipation of the transaction inflated the market price. The Schedule TO compared this price with the 52-week period ending "[p]rior to that announcement," implying an end-date of December 22.
The supplemental disclosure established the end date for the initial 52-week period as March 8, rather than March 10. The supplement likewise fixed the end date for the other 52-week period by changing the original reference from the announcement of the contemplated tender offer to the December 18 notification to the Sauer-Danfoss Board. The supplemental disclosure also corrected the 52-week high during the period ended December 18, which was $9.90 on January 6, 2009. That price was also the 52-week high for the period ended December 22, which meant the Schedule TO's reference to $9.75 was a careless mistake.
Reputable media publications have long known that fact-checking has value, and they pay people to do it. Here, the plaintiffs provided that service, and the first corrective disclosure provided a compensable benefit.
Second, the Amended Complaint pointed to a statement on page 5 of Schedule E of the Offer to Purchase (which disclosed the changed projections for 2010) to the effect that "[Sauer-Danfoss] Management at this moment in time has no information that supports altering the projection for 2012." The plaintiffs observed that a chart on page 2 of Schedule E altered the 2012 sales growth projections from 13% in the January projections to 8% in the February projections without explaining why the projection was changed. The Amended Complaint asked "why?"
On April 6, Sauer-Danfoss disclosed that:
Amendment No. 3 to Sauer-Danfoss Schedule 14D-9, at 3. This supplemental disclosure states what an investor could determine from the original disclosure. The description of the Updated Management Projection stated that management was projecting higher-than-expected sales for 2010, but there was "[n]o new information available that would suggest a change to the outlook for 2012." Offer to Purchase, Schedule E at 2. Consistent with this statement, the chart on page 2 of Schedule E showed an increase in projected 2010 sales from $1,250,000 to $1,340,000, but no change in projected 2012 sales. The description revealed that "[m]anagement rationalized the sales for 2011 based on 2010 and 2012," id., and the chart showed a corresponding increase in 2011 sales from $1,372,500 to $1,433,800, smoothing out the growth from 2010 to 2012. As a result of the lack of change in 2012, the forecasted increase in sales growth for that year declined. Long division provides the explanation that the plaintiffs demanded. When Year 3 projections remain the same, but projections for Years 1 and 2 increase relative to Year 3, then there is less growth from Year 1 or 2 to Year 3. If both Year 0 and Year 3 remain the same, then there is no change in the overall growth from Year 0 to Year 3. Increasing the projections for Years 1 and 2 will change the annual growth rates but will not change the overall growth rate. The supplemental disclosure was immaterial and did not benefit stockholders.
Third, the Amended Complaint noted that according to page 15 of the Schedule 14D-9, "[o]n February 10, 2010, K & E and Reed Smith spoke twice by telephone to discuss the 90% Condition and related legal issues. K & E indicated the Special Committee's preference that the 90% Condition be eliminated from the offer." The plaintiffs objected that the Schedule 14D-9 failed to disclose the Special Committee's rationale for eliminating the 90% Condition. Compl. ¶ 56(f). Again, the Amended Complaint asked "why?"
The amended Schedule 14D-9 explained that the Special Committee sought to remove the condition "as doing so would have the effect of making the proposed offer less conditional, thereby increasing the likelihood it would be consummated." Amendment No. 3 to Sauer-Danfoss Schedule 14D-9, at 3. The amended Schedule 14D-9 also disclosed that "the Special Committee considered the fact that, in order for the majority of the minority condition to be satisfied, Danfoss would need to own approximately 88% of the Company Common Stock upon the expiration of the offer, and that it was unlikely this percentage threshold would be satisfied but the 90% Condition would not be." This was not a material disclosure.
Delaware law does not require that a fiduciary disclose its underlying reasons for acting. Newman v. Warren, 684 A.2d 1239, 1245-46 (Del.Ch.1996) (Allen, C.). In Newman, the board of directors of Professional Sports Care Management, Inc. ("PSCM") unanimously recommended that its stockholders approve a stock-for-stock merger. Id. at 1242. A holder of 100 shares of PSCM common stock filed a class action and sought a temporary restraining order against the deal because the proxy statement failed to disclose (i) "the reasons that one of the directors of PSCM (Mr. Wiggins) ... opposed board
Id. at 1246 (internal citations omitted).
As in Newman, the Amended Complaint did not state a claim when it sought disclosure of the directors' reasons for seeking to remove the 90% condition. The Schedule 14D-9 accurately informed stockholders of the material fact that the Special Committee negotiated on their behalf to attempt to remove the condition, but failed. Asking "why" does not state a meritorious disclosure claim. Id.; see also Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135, 145 (Del.1997) (affirming dismissal of a claim that did not identify disclosure violations but rather "pose[d] a question"). Accordingly, this disclosure was not material, did not benefit stockholders, and will not support a fee award.
Fourth, the Amended Complaint observed that Danfoss only retained a financial advisor (Ladenburg Thalmann & Co., hereinafter "Ladenburg") to conduct a "premiums analysis." Again, the plaintiffs asked "why," complaining that the Schedule TO "fails to disclose why Ladenburg was retained by Danfoss A/S only to undertake a premiums analysis of comparable transactions and not a full valuation analysis of Sauer-Danfoss." Compl. ¶ 55(g).
On April 5, Danfoss disclosed that:
Amendment No. 3 to Danfoss Schedule TO. This "why" claim fails under Newman. See 684 A.2d at 1245-46; see also In re Siliconix Inc. S'holders Litig., 2001 WL 716787, at *12 (Del.Ch. June 21, 2001) (holding that basis for controlling stockholder's selection of tender offer price "is not the type of information that would likely influence (even in the absence of a premium to market) a shareholder's decision not to tender"). The Schedule TO accurately stated that Danfoss obtained a premiums analysis and attached a copy of that analysis. This supplemental disclosure was immaterial and did not benefit stockholders.
Fifth, page 16 of the Schedule 14D-9 disclosed that "[o]n the morning of February 24, 2010, the Company's senior management sent to the Special Committee, Lazard and K & E revised Updated
On April 6, Sauer-Danfoss disclosed that the adjustments were made "due to the uncertainty around sales development in the second half of 2010." Amendment No. 3 to Sauer-Danfoss Schedule 14D-9. It was implicit in the original disclosure that the senior management was more conservative than staff. The revelation that senior management adjusted the projections downward because of uncertainty about sales performance added nothing. If the defendants had disclosed some other reason for the adjustment, such as a specific reason that sales were tailing off, then that fact might have been material. Because the supplemental disclosure did not remedy a material omission, this disclosure did not benefit the shareholders and will not support a fee award.
Sixth, the Amended Complaint criticized the Schedule 14D-9 for failing to disclose whether any of the projections it described "were adjusted to remove the expenses related to Sauer-Danfoss maintaining its status as a public company." Compl. ¶ 56(h). The amended Schedule 14D-9 disclosed that "[t]he Updated Management Projections were not adjusted to remove any expenses related to the Company maintaining its status as a public company. Management considered the amount of such expenses on an annual basis to be immaterial to the Company's overall projected performance." Amendment No. 3 to Sauer-Danfoss Schedule 14D-9, at 3.
A plaintiff does not state a disclosure claim by asking whether or not something happened. Omitting a statement that the board did not do something is not material, because "requiring disclosure of every material event that occurred and every decision not to pursue another option would make proxy statements so voluminous that they would be practically useless." In re Lukens Inc. S'holders Litig., 757 A.2d 720, 736 (Del.Ch.1999). If a disclosure document does not say that the board or its advisors did something, then the reader can infer that it did not happen. See In re Netsmart Techs., Inc. S'holders Litig., 924 A.2d 171, 204 (Del.Ch.2007) ("[S]o long as what the investment banker did is fairly disclosed, there is no obligation to disclose what the investment banker did not do."). A supplemental disclosure explicitly stating that the board and its advisors did not adjust its projections was immaterial and did not benefit stockholders.
Seventh, the Amended Complaint observed that on page 27 of the Schedule 14D-9, Lazard was said to have calculated a terminal value for its discounted cash flow "using an earnings before interest, tax, depreciation and amortization ("EBITDA") exit multiple range of 6.00x to 7.50x." The plaintiffs complained that the Schedule 14D-9 "fail[ed] to disclose Lazard's methodology/rationale for arriving at this range, and why the selected range is lower than the range of 10.1x to 14.2x indicated by the Hydraulic Peers, lower than the 8.4x median of Selected Customers and lower than the 9.8 median of Mid-Cap Industrials," each of which were multiples of historical 2009 earnings as opposed to
When a plaintiff's "only beef is that [an investment banker] made mistakes in subjective judgment, even though those judgments were disclosed to the ... stockholders," then the plaintiff has not identified a material omission or misstatement. In re JCC Hldg. Co., 843 A.2d 713, 721 (Del.Ch. 2003). The original Schedule 14D-9 disclosed the multiples the banker selected for the discounted cash flow analysis, and both the original Schedule 14D-9 and the original Schedule 13E-3 disclosed the multiples implied by the companies deemed comparable for purposes of the comparable companies transaction. The summary of the discounted cash flow analysis did not mislead stockholders into thinking that the discounted cash flow analysis's exit multiple range was derived from the comparable companies. It was obvious from the disclosures that the bankers exercised their subjective judgment. The additional information was immaterial.
Eighth, the Amended Complaint observed that on page 28 of the Schedule 14D-9, it stated that "Lazard applied EBITDA multiples of 8.0x to 9.0x to the Company's calendar year 2010 estimated EBITDA based on the Financial Forecasts." The plaintiffs complained that the median EBITDA multiple for each of the peer groups analyzed by Lazard exceeded 9.0x and that the Schedule 14D-9 failed to disclose why Lazard selected a below-median multiple. Compl. ¶ 56(m). This was another "why?" Sauer-Danfoss explained that
Amendment No. 3 to Sauer-Danfoss Schedule 14D-9, at 4. This disclosure was not material.
A "quibble with the substance of a banker's opinion does not constitute a disclosure claim." JCC, 843 A.2d at 721. The original Schedule I4D-9 disclosed the calculation of the comparable companies' multiples and the banker's selection of a multiple for Sauer-Danfoss based on those multiples "in a manner that allowed a reasonably sophisticated investor to see the key judgments that [the banker] made and to make her own independent determination of whether those judgments struck her as proper." Id. After the language attacked by the plaintiff, the very next paragraph of the original Schedule 14D-9 stated that
The original Schedule 14D-9 therefore already explained the rationale for Lazard's subjective judgment that these companies merited higher multiples than Sauer-Danfoss. The additional explication gave stockholders no new information.
Ninth, page 11 of the Schedule 14D-9 stated that:
The Amended Complaint objected that the Schedule 14D-9 failed "to disclose the precise nature of the non-public information in Danfoss A/S's possession and how this issue was resolved." Compl. ¶ 56(r). The amended Schedule 14D-9 disclosed that the confidential information "consisted primarily of information regarding the Company's business, strategy, competitors, competitive position, 2010 budget and projected financial information." Amendment No. 3 to Sauer-Danfoss Schedule 14D-9, at 3. The amendment further disclosed that the issue "was subsequently rendered moot when Danfoss was informed about the existence of the Management Projections and the parties agreed that such projections would be disclosed in connection with any proposed offer."
This explanation could not have been material to any shareholder. It stated the obvious. Any reasonable stockholder would have concluded from the initial disclosure that Danfoss wanted to disclose information that was sensitive because it contained insights into Sauer-Danfoss's competitive position, strategy, and internal financial information. That is all the supplemental disclosure says. The supplemental disclosure was not material information.
Tenth, pages 12 to 13 of the Schedule 14D-9 disclosed that:
The Amended Complaint objected to the failure to "disclose the substance of these discussions." Compl. ¶ 56(s). The amended Schedule 14D-9 disclosed that the discussion addressed "the New Credit Agreement, Danfoss'[s] role as the major creditor of the Company and the leverage these facts may or may not provide the Special Committee in its negotiations with Danfoss." Amendment No. 3 to Sauer-Danfoss Schedule-14D-9, at 3.
This supplemental disclosure explained that when the Committee and its advisors discussed "the significance" of the debtor-creditor relationship between Danfoss and Sauer-Danfoss, they were specifically discussing how that relationship affected the Committee's "leverage." It is difficult to imagine what else a reasonable stockholder would have thought the Special Committee and its advisors were talking about. The only "significance" that relationship could have "in the context of the proposed offer" was for the parties' respective negotiating positions, i.e., their leverage. The supplemental disclosure again stated the obvious.
Finally, page 14 of the Schedule 14D-9 reported that Danfoss regarded management's projections as "overly optimistic." The plaintiffs complained that the Schedule 14D-9 did not explain why. Compl. ¶ 56(t). The amended Schedule 14D-9 explained that Danfoss held this view "due to the Company's failure to meet its past projections and the significant increase in projected performance of the Company from the projections that management prepared just a few weeks before, in early January, to the more recent projections."
There are at least three reasons why this final supplemental disclosure did not remedy a material omission. First, the claim simply asked "why?" Second, the original Schedule 14D-9 already disclosed on page 13 that "Danfoss was skeptical of the Management Projections based on the Company's failure to achieve past projections," and that Ladenburg communicated this view to the Committee on January 21, and again on January 27, before doing so a third time on February 5. Third, the other reason given in the supplemental disclosure appears to be inaccurate. The supplemental disclosure referred to a conversation that took place on February 5, 2010, when the parties were discussing the Management Projections created in early January. The Updated Management Projections with "the significant increase in projected performance" were not created until February 24, 2010. Increased projections that had not yet been prepared could not have provided a reason for Danfoss to regard the original projections as "overly optimistic." The plaintiffs do not get credit for prompting the defendants to remedy an immaterial omission with an apparent misstatement.
"[T]he amount of an attorneys' fee award is within the discretion of the court." In re Plains Res. Inc. S'holders Litig., 2005 WL 332811, at *3 (Del.Ch. Feb. 4, 2005). In determining an appropriate award, a court applying Delaware law should consider:
Id. at *3 (citing Sugarland Indus., Inc. v. Thomas, 420 A.2d 142, 149 (Del.1980)). "This court has traditionally placed greatest weight upon the benefits achieved by the litigation." In re Anderson Clayton S'holders Litig., 1988 WL 97480, at *3 (Del.Ch. Sept. 19, 1998) (Allen, C). In weighing that benefit, the Court must "recall that what is relevant is the benefit achieved by the litigation, not simply a benefit that, post hoc ergo procter hoc, is conferred after the litigation commences." Id. For this reason, "[t]he last two elements are often considered the most important." Plains Res., 2005 WL 332811, at *3. The time expended by counsel is considered as a cross-check to guard against windfalls, particularly in therapeutic benefit cases. See Brinckerhoff, 986 A.2d at 396.
All supplemental disclosures are not equal. To quantify an appropriate fee award, this Court evaluates the qualitative importance of the disclosures obtained. Similar disclosures merit similar fee awards. See Plains Res., 2005 WL 332811, at *5 ("The court awards fees for supplemental disclosures by juxtaposing the case before it with cases in which attorneys have achieved approximately the same benefits." (internal quotation marks omitted)); In re Dr. Pepper/Seven Up Cos. S'holders Litig., 1996 WL 74214, at *5 (Del.Ch. Feb. 9, 1996) ("Fee applications in class actions resulting in nonquantifiable, nonmonetary benefits have generated decisions from this Court that provide guidance for the exercise of ... discretion."). Consistency promotes fairness by treating like cases alike and rewarding similarly situated plaintiffs equally. Establishing baseline expectations helps plaintiffs' counsel evaluate litigation opportunities and assists parties in negotiating reasonable fee awards. Recognizing the ranges developed through case-by-case adjudication — often in unreported transcript rulings — provides sister jurisdictions with helpful guidance when awarding fees in cases governed by Delaware law. Greater uniformity reduces opportunities for forum-shopping and other types of jurisdictional arbitrage, such as litigating in one court and then settling in another or presenting multiple fee applications to multiple courts.
A court can readily look to fee awards granted for similar disclosures in other transactions because enhanced disclosure is an intangible, non-quantifiable benefit. Consequently, the magnitude of the benefit does not vary with the size of the deal. Indeed, the underlying vote could involve an issue like the election of directors that lacks any explicit linkage to quantifiable value. Only for a microcap company would the Court need to consider adjusting a disclosure-only award downward to avoid a punitive result. See Jeffrey Benison IRA v. Critical Therapeutics, Inc., C.A. 4039-VCL, at 61, 63 (Del.Ch. Feb. 26, 2009) (TRANSCRIPT) (considering size as factor for microcap company). Likewise the benefit does not vary with the size of the stockholder base. Whenever a plaintiff generates enhanced disclosure in connection with stockholder action, the benefit is conferred.
Recent contested fee awards in disclosure-only cases reveal a range of discretionary awards with concentrations at certain levels. This Court has often awarded fees of approximately $400,000 to $500,000 for one or two meaningful disclosures, such as previously withheld projections or undisclosed conflicts faced by fiduciaries or their advisors. See Appendix A. Disclosures of questionable quality have yielded
I have focused on awards in contested cases because of the dynamics of settlement. In theory, awards should be the same for both contested and uncontested fee applications. In both scenarios, the Court has an independent duty to award a fair and reasonable fee.
When the requested fee is uncontested, the plaintiff frequently does not parse the benefit-to-fee relationship to a meaningful degree and often fails to provide insightful comparisons to precedent awards. Historically, plaintiffs' counsel have justified agreed-upon fee awards with lengthy string cites to orders approving prior settlements, each with a fee number in parentheses. A string cite of this nature provides no information about the terms of the prior settlement, the nature of the disclosures, the efforts that merited the fee, or other pertinent factors. The supporting compendia that plaintiffs' counsel habitually file contain only copies of the orders, which themselves do not provide any of the underlying information. There is also the natural judicial tendency when reviewing an uncontested fee application that will be paid by the defendants (rather than as a deduction from a common fund otherwise distributable to the class) to defer if the amount falls within a plausible range, even if higher than what the Court might independently award. These factors warrant de-emphasizing the precedential value of uncontested fee awards, particularly when a meaningful body of contested fee award precedent exists.
Apt precedents for this case are Triarc, BEA, and Brinckerhoff. In Triarc, the plaintiffs sued to enjoin a controller's proposed going-private transaction priced at $18 per share. 2006 WL 903338, at *1. The board's special committee decided to recommend against the transaction, and the proposal was withdrawn in favor of a Dutch auction tender offer at $16.25 to $18.25 per share. The plaintiffs filed an amended complaint — apparently copied from a related federal action, Decl. Jonathan Hurwitz Opp. Fees ¶ 21, Triarc, C.A. 16700-NC (Del. Ch. filed Feb. 24, 2006) — that alleged disclosure violations. The
In BEA, the plaintiffs filed suit upon the announcement of a third-party acquisition. 2009 WL 1931641, at *1. After some wrangling over the leadership role, see In re BEA Sys., Inc. S'holders Litig., 2008 WL 116338 (Del.Ch. Jan. 4, 2008), the plaintiffs filed a consolidated complaint that alleged disclosure violations. When the defendants issued their definitive proxy statement, they corrected two mistakes that the complaint identified. First, the preliminary proxy had misidentified the name of an analyst on whose work the board's investment banker relied. Elsewhere in the same paragraph, the preliminary proxy identified the analyst correctly. The definitive proxy fixed the errant reference. See Pls.' Br. Supp. Fees & Expenses, Ex. D at 33, Ex. E at 33, In re BEA Sys., Inc. S'holders Litig., C.A. 3298-VCL (Del. Ch. filed Mar. 26, 2009). Second, the preliminary proxy mistakenly stated that a press release was issued after a certain telephonic board meeting. The definitive proxy correctly noted that the press release preceded the meeting. See id., Ex. D at 23, Ex. E at 23. Plaintiffs' counsel asked for $350,000; the defendants argued against any award. Finding that "the benefit achieved in the litigation was unmistakably modest," Vice Chancellor Lamb awarded $81,297 in total. BEA, 2009 WL 1931641, at *1.
In Brinckerhoff, a plaintiff who had filed suit in Texas state court objected to a Cox Communications settlement in Delaware, then settled the objection for four sentences of disclosure and a promise not to oppose a fee award of up to $500,000. 986 A.2d at 396-97; see also TEPPCO P'rs, L.P., Schedule 14A, filed Oct. 9, 2009. The supplement reiterated two already-disclosed points and elaborated on the discount rates used in a fairness opinion. Based on the slight benefit obtained, I awarded the objector $80,000. Id.
This case resembles the minimally beneficial disclosures obtained in Triarc, BEA, and Brinckerhoff, I therefore start with a base range of $75,000 to $80,000.
The time and effort expended by counsel serves a cross-check on the reasonableness of a fee award. See Brinckerhoff, 986 A.2d at 396. This factor has two separate but related components: (i) time and (ii) effort.
The time (i.e., hours) that counsel claim to have worked is of secondary importance. As the federal courts learned while experimenting with the lodestar method, emphasizing time encourages
Court Awarded Attorney Fees: Report of the Third Circuit Task Force, 108 F.R.D. 237, 248 (1985). This Court has observed similar practices,
The more important aspect is effort, as in what plaintiffs' counsel actually did. When an entrepreneurial plaintiffs' firm engages in adversarial discovery, obtains documents from third parties, pursues motions to compel, and litigates merits-oriented issues, they are likely representing the interests of the class. See Lance P. McMillian, The Nuisance Settlement "Problem"; The Elusive Truth and a Clarifying Proposal, 31 Am. J. Trial. Advoc. 221, 258 (2007) ("[D]oes the plaintiff put its money where its mouth is? ... [T]he willingness or unwillingness of the plaintiff to devote resources to a case provides a window into how that plaintiff views the litigation."); id. at 236 n. 49 ("The longer the plaintiff litigates and the more money it invests into a case, the less likely the initial filing was motivated by nuisance intent."). By contrast, "[i]f cases are filed, sit idle for extended periods of time, and then settle or are dismissed without evidence of any action by the plaintiffs' attorneys, the claim could be made that these cases amount to little more than a sale [or an attempted sale] of a release of all potential claims in litigation." Robert B. Thompson & Randall S. Thomas, The New Look of Shareholder Litigation: Acquisition-Oriented Class Actions, 57 Vand. L.Rev. 133, 154 (2004).
In this case, the answer to "What did the plaintiffs do?" is "Not much." They filed fast, sat idle, then shifted into settlement mode. They conducted no adversarial discovery and obtained only the standard package of documents that defendants routinely provide to facilitate a disclosure-only settlement. Then they bargained for insubstantial disclosures. The absence of effort and the interest in settlement reinforces the appropriateness of a low award of the magnitude approved in Triarc, BEA, and Brinckerhoff.
Relative to other transaction-related litigation, this case did not present complex
Plaintiffs' counsel technically pursued this case on a contingent basis, but "[d]isclosure claims ... are relatively safe in terms of forcing a settlement." Id. Because disclosure settlements are cheap and easy, and because the defendants like to use supplemental disclosures to resolve deal litigation, entrepreneurial plaintiffs' lawyers do not face significant contingency risk when challenging transactions. See Weiss & White, supra, 57 Vand. L.Rev. at 1830 ("[O]ur examination of all merger-related class actions filed in 1999-2001 suggests that the attorneys who brought these cases did not face much in the way of contingency risk."). Plaintiffs' counsel entered this case "knowing that the defendants' ability to issue supplemental disclosures and the hydraulic pressure of deal closure w[ould] combine to create a ready-made settlement opportunity." In re Emerson Radio S'holder Deriv. Litig., 2011 WL 1135006, at *6 (Del.Ch. Mar. 28, 2011). They started with "an obvious and well-marked exit in sight." Id. The disclosure precedents involved comparable levels of contingency risk, and this factor does not provide any reason to depart from precedent awards.
The defendants do not contest the standing and ability of plaintiffs' counsel. The plaintiffs' lawyers who brought this case regularly pursue deal litigation. The same law firms or their peers pursued many of the precedent cases. Nothing about this factor merits a departure from the precedent ranges.
Delaware law recognizes the value of representative litigation.
This case does not merit a significant award. The precedents in Triarc, BEA, and Brinckerhoff support an award of $75-80,000. I award $75,000.
Plaintiff's Principal
Case Fee Award Efforts Disclosures/Benefit
Continuum Capital v. Nolan, $525,000 • Three depositions (all pre-MOU) • Management projections
C.A. 5687-VCL (Del. Ch, Feb. 3,
2011)
• Settled without an injunction • Information about advisor's
hearing buy-side conflict
• Information about advisor's fee
In re Burlington N. Santa Fe $450,000 • Three depositions (all • Management projections
S'holder Litig., C.A. 5043-VCL confirmatory)
(Del. Ch. Oct. 28, 2010)
• Settled without an injunction • Details about negotiation
hearing process
In re Zenith Natl Ins. Corp. $400,000 • Four depositions (all post-disclosures, • Management projections S'holders Litig., C.A. 5296-VCL but contested) (Del. Ch. July 26,2010) • Briefed and argued motion for • Details about negotiation preliminary injunction process • Injunction denied • Details about advisor's prior work for bidder In re Wyeth S'holders Litig., C.A. $460,100 • Three depositions (one pre-MOU, • Details about management 4329-VCN (Del. Ch. June 29, two confirmatory) projections 2010) • Settled without an injunction • Details about negotiation hearing process • Details about contingent value right • Details of advisors' methodology In re Sepracor Inc. S'holders $550,000 • Three depositions (two pre-MOU, • Management projections Litig., C.A.4871-VCS(Del. Ch. one confirmatory) May 21, 2010) • Settled without an injunction • Additional multiples for hearing comparable companies analysis • Precedent transaction analysis used for negotiation but not valuation IBEW Local Union 98 v. Noven $450,000 • Two depositions (both • Management projections Pharms. Inc., C.A. 4732-CC (Del. confirmatory) Ch. Dec. 8, 2009) • Filed opening brief for • Details about negotiation preliminary injunction process • Settled without an injunction • Details of fairness analysis hearing In re Nat'l City Corp. S'holders $400,000 • Three depositions (one pre-MOU, • Details about alternative Litig., 2009 WL 2425389, at *6 two confirmatory) transactions (Del.Ch. July 31, 2009), affd, 998 A.2d 851 (Del.2010) (TABLE) • Settled without an injunction • Additional details about hearing potential participation in TAR? • Details about advisors' potential conflict N.J. Bldg. Laborers Pension and $358,185 • Four depositions (all • Management projections Annuity Funds v. Applebee's confirmatory) Int'l, Inc., C.A. 3124-CC (Del.Ch. Feb. 27, 2008) • Settled without an injunction • Details about advisors' hearing potential conflict In re James River Gp., Inc. $400,000 • Four depositions (all • Management projections S'holders Litig., 2008 WL 160926 confirmatory) (Del.Ch. Jan. 8, 2008) • Settled without an injunction • Details of activity during the hearing `go-shop' period • Details about advisor's prior work for bidder In re Genencor Int'l, Inc. $450,000 • Five depositions (all pre-MOU) • Disclosure of advisor's fee S'holders Litig., C.A. 1052-N (Del. Ch. June 2, 2005) • Filed opening brief for • Details about negotiations preliminary injunction • Settled without an injunction • Confirmed that advisor did not hearing place any value on subsidiary In re Cardiac Sci., Inc. S'holders $300,000 • Five depositions (all pre-MOU) • Details of negotiation process Litig., C.A. 1138-N (Del. Ch. Jan. 4, 2005) • Filed opening brief for • Details on value of certain preliminary injunction assets • Settled without an injunction • Additional details on CEO's hearing interest in merger
Appendix B Plaintiffs Principal Case Fee Award Efforts Disclosures/Benefit Brinckerhoff v. Tex. E. Prods. $ 80,000 • Sent pre-suit letter to board • Details of discount rates used Pipeline Co., 980 A,2d 370 (Del. in fairness opinion Ch.2010) • Filed complaint in Texas • Objected to Cox Communications settlement • Moved to compel discovery about settlement negotiations In re BEA Sys., Inc. S'holders $ 81,297 • Supplemental disclosure made • Corrected typographical error Litig., 2009 WL 1931641 (Del.Ch. before preliminary injunction June 24, 2009) briefing, hearing, and discovery • Injunction denied • Corrected sequence of events regarding timing of press release Jeffrey Benisou IRA v. Critical $175,000 • Two depositions (both • Details on value of merger Therapeutics, Inc., C.A. 4039-VCL confirmatory) consideration (Feb. 26, 2009) • Settled without an injunction • Buyer's management hearing projections of buyer's standalone earnings, as adjusted by target's management Augenbaum v. Forman, 2006 WL $225,000 • Three depositions (all • Details of negotiation process 1716916 (Del.Ch. June 21, 2006) confirmatory) • Settled without an injunction • Details of advisor's previous hearing work for buyer In re Triarc Cos. S'holders Litig., $ 75,000 75 None beyond filing of • Fact that chairman of special 2006 WL 903338 (Del.Ch. Mar. complaint and amended committee thought deal price was 29, 2006) complaint inadequate
Appendix C
Plaintiffs Principal
Case Fee Award Efforts Disclosures/Benefit
In re Lear Corp. S'holdev Litig., $ 800,000 • Ten offensive depositions and • Information about CEO's
C.A. 2728-VCS (Del. Ch. June 3, two defensive depositions conflict of interest
2008)
• Full briefing and argument on • Information about CEO's role
application for preliminary in negotiations and sale process
injunction
• Preliminary injunction granted
Globis Capital P'rs, LP v. $1,200,000 • Four depositions (all pre-MOU) • Extensive, detailed descriptions
SafeNet. Inc., C.A. 2772-VCS of bankers' fairness opinions and
(Del. Ch. Dec. 20, 2007) underlying analyses
• Full briefing and argument on • Two complete bankers' books
application for preliminary
injunction
• Settled after injunction hearing • More than 100 pages of
disclosure
