BOUCHARD, C.
This decision is round two of an action in which a stockholder of TIBCO Software Inc. challenges the per-share consideration that a private equity fund ("Vista") agreed to pay to acquire TIBCO in a merger that closed on December 5, 2014. The merger agreement provided for stockholders to receive $24 per share. Based on the number of fully diluted shares of TIBCO outstanding, which was accurately reflected in the merger agreement, a $24 per share price implied an aggregate equity value for the transaction of approximately $4.144 billion.
Plaintiff does not challenge the sale process that led to a $24 per share merger price, which plaintiff acknowledges was a "good outcome" and which over 96% of TIBCO's stockholders voted to accept. The rub here is that Vista and TIBCO both operated under a mistaken belief that the aggregate equity value implied by the transaction was approximately $4.244 billion—approximately $100 million or $0.57 per share more than what was reflected in the merger agreement. This mistaken belief arose from a capitalization spreadsheet for TIBCO that double-counted certain shares. That spreadsheet was used by Vista during the bidding process and by TIBCO's financial advisor, Goldman, Sachs & Co., in its fairness analysis.
The share count error was discovered after the parties had signed the merger agreement on September 27, 2014. Over two weeks later, on October 16, 2014, TIBCO filed its preliminary proxy statement for the merger disclosing the share count error, which prompted plaintiff to file this action and seek to enjoin the merger. In its preliminary injunction motion, plaintiff pressed claims for reformation of the merger agreement and breach of fiduciary duty concerning the alleged failure of the TIBCO board to take any action after the share count error was discovered to obtain the additional $100 million in equity value it thought the transaction was supposed to yield.
On November 25, 2014, I issued an opinion denying plaintiff's motion for a preliminary injunction (the "PI Opinion"). Regarding the reformation claim, I explained that plaintiff had demonstrated a reasonable probability of success of proving by clear and convincing evidence that Vista and TIBCO both operated under a mistaken assumption that the implied equity value of the merger was $4.244 billion. I further concluded, however, that plaintiff had failed to demonstrate a reasonable probability of proving by clear and convincing evidence—as required under Delaware law to reform a contract—that Vista and TIBCO had specifically agreed before signing the merger agreement that the merger would be consummated at an aggregate equity value of $4.244 billion. The record instead demonstrated that what Vista offered and what TIBCO accepted when they negotiated the final terms of the merger agreement had been expressed in terms of dollars per share (i.e., $24 per share) and not in terms of an aggregate equity value.
I did not reach the merits of the fiduciary duty claim in the PI Opinion because plaintiff had failed to demonstrate the existence of irreparable harm due to the availability of a damages remedy, and because the balance of the equities clearly weighed in favor of permitting TIBCO's stockholders to decide whether or not to approve the merger and accept $24 per share for their stock of TIBCO, which they have now done.
After the merger closed, plaintiff, with the benefit of having taken some discovery, amended his complaint. The amended complaint asserts claims for reformation, breach of fiduciary duty, aiding and abetting (against Goldman), professional malpractice (against Goldman), and unjust enrichment (against Vista and Goldman). Defendants moved to dismiss the amended complaint in its entirety for failure to state a claim for relief. For the reasons explained below, I conclude that all of the claims, except the claim for aiding and abetting claim against Goldman, fail to state a claim for relief.
The reformation claim is legally deficient for the same reason plaintiff came up short at the preliminary injunction phase of this case. Specifically, plaintiff has failed to allege facts demonstrating the existence of an antecedent agreement between Vista and TIBCO inconsistent with the price term of the merger agreement. Thus, although I am sympathetic to plaintiff's desire to recover the additional $100 million that Vista apparently was willing and intended to pay to acquire the equity of TIBCO, his claim for reformation simply does not pass muster under the strict requirements of Delaware law for modifying the unambiguous terms of a contract.
As to the fiduciary duty claim, I conclude that the complaint states at most a claim for a breach of the duty of care by TIBCO's directors for their alleged failure to adequately inform themselves in the wake of the discovery of the share count error about certain basic matters one rationally would expect a board to explore to properly assess its options. But because the directors are exculpated for breaches of the duty of care, the fiduciary duty claim will be dismissed. That claim, however, forms the predicate for an aiding and abetting claim that has been sufficiently pled against Goldman. In particular, the amended complaint alleges facts from which it is reasonably conceivable that Goldman knowingly participated in a breach of the TIBCO board's duty of care by creating an informational vacuum when it failed to apprise the board of a critical piece of information: that, during the crucial period in October 2014 when the board was considering options concerning the share count error, Vista admitted to Goldman that it had, in fact, relied on the erroneous share count in making its $24 per share offer.
Plaintiff's professional malpractice claim against Goldman, which is asserted under California common law, fails to state a claim based on my review of precedents suggesting that California law would not allow investors to sue a financial advisor they are not in privity with for negligence to recover purely economic losses. Finally, the unjust enrichment claims are dismissed because the subject matter concerning each of those claims is governed by a comprehensive contract.
Defendant TIBCO Software Inc. ("TIBCO" or the "Company"), a Delaware corporation based in Palo Alto, California, is in the enterprise software industry. TIBCO is named as a defendant solely as a necessary party for the claim to reform the Agreement and Plan of Merger dated as of September 27, 2014 (the "Merger Agreement").
Defendants Vivek Ranadivé, Nanci Caldwell, Eric C.W. Dunn, Manuel A. Fernandez, Philip M. Fernandez, Peter J. Job, David J. West, and Philip K. Wood were the eight members of the TIBCO board of directors (the "Board") during the events in question. Each was a director from at least June 2014 until the merger (hereafter, the "Merger") closed, with three directors having joined the Board in 2014. Ranadivé was the Chairman of the Board and the Company's Chief Executive Officer from the Company's founding in 1997 through the closing of the Merger. The individual director defendants are referred to collectively as the "Director Defendants."
Defendant Vista Equity Partners V, L.P. ("Vista V") is a fund affiliated with private equity firm Vista Equity Partners. It formed two entities to acquire TIBCO: (i) defendant Balboa Intermediate Holdings, LLC, a Delaware limited liability ("Balboa"); and (ii) its merger subsidiary, defendant Balboa Merger Sub, Inc., a Delaware corporation ("Merger Sub"). For simplicity, I refer to these three defendants collectively as "Vista."
Defendant Goldman, Sachs & Co. ("Goldman") is an investment bank. It had been TIBCO's financial advisor before the Board initiated the sale process. In September 2014, a special committee formed to manage the sale process hired Goldman to act as its financial advisor. For its advisory services and its fairness opinion in connection with the Merger, Goldman received $47.4 million from TIBCO.
Plaintiff Paul Hudelson was a TIBCO stockholder at all relevant times. He brings this lawsuit individually and on behalf of a class of all TIBCO stockholders, excluding defendants and their affiliates, during the period from September 26, 2014 through the closing of the Merger on December 5, 2014.
During the first half of 2014, several private equity firms contacted Ranadivé, then TIBCO's Chairman and CEO, to express interest in possible transactions, including a potential acquisition of the entire Company. The Board did not immediately pursue these inquiries.
On June 3, 2014, TIBCO pre-announced its financial results for the second quarter of 2014, which were lower than Wall Street's estimates. On June 6, 2014, the Board held a special meeting to discuss the Company's financial outlook and a potential sale of the Company. Representatives of Goldman attended the meeting and gave a presentation on TIBCO's general market position and strategic alternatives.
On July, 11, 2014, the Board called a second special meeting after receiving additional market analysis from Goldman. At the July 11 meeting, the Board instructed Goldman to engage in a comprehensive review of the strategic alternatives available to the Company. On July 29, 2014, at a third special meeting, the Board formally decided to explore a possible sale of the entire Company. The Board decided to reach out to the financial sponsors that had expressed interest earlier in 2014 in acquiring the entire Company.
On August 16, 2014, the Board held a fourth special meeting, attended by representatives of Goldman. The Board determined to engage in further review of the strategic alternatives available to the Company and to form a special committee for that review comprised of defendants Caldwell, Dunn, and West (the "Special Committee"). The Special Committee was authorized to engage advisors and charged with reviewing all strategic alternatives available to TIBCO and making a recommendation to the Board regarding a course of action. On August 18, 2014, the Special Committee held its first meeting, during which it directed Goldman to contact a list of potential acquirers limited to those who would potentially buy the entire Company.
While Goldman had been analyzing possible strategic alternatives for TIBCO from at least June 2014 and negotiating with potential acquirers starting in August 2014, the relationship was not formalized until September 1, 2014, when Goldman signed an engagement letter (the "Engagement Letter"). The Engagement Letter entitled Goldman to a $500,000 retainer, which would be the only compensation Goldman would receive if no transaction occurred, and to a transaction fee of 1% of the "aggregate consideration" paid for the Company's equity securities, assuming a transaction was done at $24.50 per share or less. Under this arrangement, almost 99% of Goldman's final transaction fee of $47.4 million became contingent on closing a transaction.
On September 3, 2014, the Company issued a press release announcing the formation of the Special Committee to review the strategic and financial alternatives available to TIBCO. Goldman assumed responsibility for negotiations with potential acquirers, and for managing TIBCO's electronic data room of due diligence materials and responding to the bidders' diligence-related questions. Throughout late August and September, Goldman discussed an acquisition of the Company with twenty-four potential acquirers. Two serious bidders eventually emerged: Vista and Sponsor B. They were the only bidders to receive access to the data room.
On August 30, 2014, Vista submitted a non-binding indication of interest for "an all-cash transaction at $23.00 to $25.00 per share of common stock and common stock equivalents."
In late August, Vista and Sponsor B sought diligence information regarding TIBCO's share count. TIBCO and Goldman prepared a spreadsheet showing the number of fully diluted shares that would need to be acquired in a merger as of August 15, 2014 (the "First Cap Table"). The First Cap Table did not list the number of fully diluted shares—it was up to the bidders to compute that number.
It could not be determined from the face of the First Cap Table (or from subsequent versions created by Goldman and the Company) that those 4.3 million unvested restricted shares also were included in the outstanding common stock total. Thus, these restricted shares were being double-counted—once as unvested restricted shares and again as outstanding common shares. This double-counting of unvested restricted shares is at the heart of TIBCO's and Vista's misunderstandings about the total purchase price of the Merger.
According to plaintiff, the cap tables provided to Vista led it to believe that in assessing its bid and articulating it on a per-share basis, it had to divide the total purchase price it was willing and able to pay by a greater number of shares outstanding than in fact existed. The cap tables told Vista, in essence, that it had to spread the per-share merger consideration to over four million shares that did not exist.
In mid-September 2014, Vista and Sponsor B requested updated share count information from Goldman. TIBCO and Goldman prepared an updated spreadsheet reflecting the Company's share count as of September 19, 2014 (the "Second Cap Table"). The Second Cap Table contained the same share count error as the First Cap Table: the unvested restricted shares (now approximately 4.2 million shares) were listed as a component of the outstanding stock-based equity awards, and were included in the outstanding common stock total, without any notation of this double-counting. Goldman sent the Second Cap Table to the bidders on September 21, 2014.
On September 23, 2014, Sponsor B submitted a proposal to acquire TIBCO for $21 per share. On September 24, 2014, Vista submitted a bid to acquire TIBCO for $23 per share. On September 25, 2014, Sponsor B raised its proposal to $22.50 per share. On September 25, 2014, after Sponsor B raised its proposal, Goldman asked the bidders to submit final proposals by early afternoon on September 26, 2014.
During the morning of September 26, 2014, the Board and Special Committee held a joint meeting attended by Goldman representatives and TIBCO management. At this meeting, Goldman reviewed Vista's $23 per share and Sponsor B's $22.50 per share proposals. The Board told Goldman to maximize the consideration offered by the competing bidders, and discussed the financial model and forecasts that Goldman would use in preparing a fairness opinion.
The Complaint explains that a private equity firm like Vista typically looks for a per-investment target internal rate of return ("IRR") somewhat higher than its target IRR for its overall fund. Target IRR can be expressed in terms of a targeted return on a cash-on-cash basis, or a "hurdle rate," or can be expressed as an expectation that an acquired asset can be sold for X times the purchase price within Y years. To evaluate whether it can expect to achieve a minimum hurdle rate, a private equity firm will look at the target's projections and potential exit value at the end of the investment period. Running the projections and exit value through the private equity firm's financial model will determine how much it believes the target is worth. The private equity firm will then assess its ability to finance the acquisition and the expected cost of doing so. Based on these calculations, the firm determines the maximum aggregate investment it can make in the target company and still have a reasonable expectation of achieving its targeted return (i.e., meeting its hurdle rate), nets out any costs or debt assumption obligations, then divides the aggregate equity value by the number of shares and share equivalents outstanding to determine the maximum per-share price it can offer. In short, as plaintiff explains, the total enterprise and equity valuation necessarily comes first, and the per-share price is calculated thereafter.
During the morning of September 26, 2014, an internal committee of Vista that was responsible for approving acquisition bids (the "Vista Committee") met to discuss the maximum bid Vista could make using the methodology described above.
On September 26, after the Vista Committee meeting but before Vista had submitted a higher bid, TIBCO discovered an error in the share count information in the Second Cap Table, but not the share count error at the heart of this case. Specifically, the Second Cap Table omitted approximately 3.7 million shares in the Company's Long Term Incentive Plan (the "LTIP"), and thus understated the common stock outstanding by approximately 3.7 million shares. To correct the LTIP share count error, TIBCO and Goldman revised the Second Cap Table to reflect the Company's share count as of September 25, 2014 (the "Final Cap Table"). The Final Cap Table properly identified the approximately 3.7 million LTIP shares as a separate line item within the outstanding stock-based awards category, but it still failed to note that the unvested restricted shares (which now totaled 4,147,144 shares) that were listed as a separate line item in that same category also were included in the total common stock outstanding. Thus, the error concerning unvested restricted shares remained unrectified.
Immediately after discovering the LTIP share count error, Goldman informed the bidders, and the submission of final bids was suspended until revised share count data could be circulated. Later in the afternoon on September 26, Goldman sent Vista summary share count data, which corrected the LTIP share count error, but which still double-counted the unvested restricted shares. Vista responded that it wanted a full, updated capitalization table "in the exact format" used for the prior cap tables. Goldman then sent the Final Cap Table to the bidders.
After receiving the Final Cap Table, Vista reran its internal leveraged buyout financial model and prepared an updated investment committee memorandum reflecting the new share count. Because correction of the LTIP share count error informed the bidders that there were more shares than previously understood, the total aggregate equity value that would allow Vista to meet its hurdle rate translated to a lower price per share. After correcting for the LTIP share count error, the maximum Vista could bid decreased from $24.25 per share to $23.97 per share. On the basis of its revised analysis, Vista submitted a proposed final bid of $23.85 per share, which implied an aggregate equity value of $4.217 billion and an enterprise value of $4.284 billion—each about $21 million lower than the maximum aggregate value that the Vista Committee had authorized earlier in the day.
In the same timeframe, Sponsor B submitted its final proposal of $23.75 per share. Goldman told Vista and Sponsor B that their bids "were not materially differentiated." After further negotiations, Goldman asked both Vista and Sponsor B to submit revised "best and final" offers that evening. Vista raised its bid from $23.85 to $24 per share (Vista's "Final Bid"). Based on the then-current share data, Vista's Final Bid of $24 per share implied an aggregate equity value of $4.244 billion and an aggregate enterprise value of $4.311 billion.
Late in the evening on October 26, 2014, Goldman told Vista that it had won the auction with its Final Bid. Goldman also told Vista that TIBCO's counsel would be in touch with Vista's counsel to finalize a merger agreement, which counsel for Vista and TIBCO had been negotiating during the bidding process. The goal was to sign a merger agreement, if approved by the Board, the next morning.
A few minutes after midnight on September 27, 2014, Vista's counsel emailed Vista's equity commitment letter to TIBCO's counsel (the "Equity Commitment Letter"), which contemplated financing the Merger from Vista's cash on hand. Specifically, in the Equity Commitment Letter, Vista V "commit[ed], conditioned upon (i) satisfaction, or waiver . . . of all conditions precedent . . . and (ii) the contemporaneous consummation of the Merger, to contribute . . . an aggregate amount up to $4,859,000,000 . . . in cash in immediately available funds" to Balboa, the Vista entity formed to make the acquisition.
A "spreadsheet showing the calculations used to arrive at the amount of the commitment" was attached to the email forwarding the Equity Commitment Letter. That spreadsheet shows that the largest component of the $4,859,000,000 commitment amount was the equity value payable to stockholders of $4.244 billion. This amount was calculated by multiplying $24 per share by approximately 176.8 million fully diluted shares outstanding, which number of shares had been derived from the Final Cap Table.
On September 27, 2014, the Special Committee and Board held concurrent telephonic meetings to review Vista's Final Bid of $24 per share and Sponsor B's final proposal of $23.75 per share. Representatives of Goldman were in attendance. Goldman presented its opinion on the fairness of Vista's Final Bid to the Board, which was based on the inaccurate share count data from the Final Cap Table. In its "Summary of Key Economic Terms," Goldman advised the Board and the Special Committee that (i) the implied enterprise value of the proposed Merger was $4.311 billion, (ii) the implied equity value to stockholders was $4.244 billion, (iii) Vista would acquire approximately 176.8 million shares, and (iv) the multiple of enterprise value for the latest twelve months' EBITDA was 18 times. Thus, Goldman's presentation utilized an erroneous share count derived from the Final Cap Table (the same 176.8 million fully diluted share figure Vista had used in making its Final Bid) when opining that $24 per share was fair.
After its presentation, Goldman delivered its written opinion that Vista's Final Bid was fair from a financial point of view (the "Fairness Opinion"). After Goldman's presentation, the Special Committee unanimously recommended that the Board approve the Merger. The Board then unanimously approved the Merger, adopted and approved the Merger Agreement, and recommended that TIBCO's stockholders vote in favor of adoption of the Merger Agreement.
Later in the morning of September 27, 2014, TIBCO and Vista signed the Merger Agreement, which is governed by Delaware law. The Merger Agreement did not state an aggregate purchase price or an implied equity value. Instead, the Merger Agreement specifically provided that, at the effective time of the Merger, each share of TIBCO common stock would be "automatically converted into the right to receive cash in an amount equal to $24.00, without interest."
The Merger Agreement included a representation from TIBCO entitled "Company Capitalization" (the "Cap Rep"). The Cap Rep stated that there were 163,851,917 outstanding common shares of TIBCO common stock, a figure that expressly included the 4,147,144 unvested restricted shares.
The Merger Agreement also provided a termination right to Vista in the event that the Cap Rep was inaccurate at closing and that any inaccuracies, individually or in the aggregate, would require Vista to pay more than $10 million above the product of $24 per share multiplied by the number of fully diluted shares derived from the Cap Rep.
Two provisions of the Merger Agreement were negotiated by TIBCO and Vista as a percentage of an assumed equity value of $4.244 billion: the termination fee in Section 8.3(b)(i) and a liability cap in Section 8.3(f).
Section 8.3(f) of the Merger Agreement defines Vista's maximum liability for any breaches of the Merger Agreement or ancillary agreements (the "Liability Cap"). According to plaintiff, merger agreements often cap acquirer liability at twice the termination fee.
On September 29, 2014, Vista and TIBCO announced the Merger in a joint press release. TIBCO, Vista, and Goldman each participated in drafting the joint press release, and had the opportunity to review and sign off on the final version. The joint press release stated that:
Although the Equity Commitment Letter provided that Vista would fund the Merger in cash, Vista had intended to obtain debt financing for a portion of the commitment amount. After the announcement of the Merger, Vista prepared presentations for potential lenders and rating agencies regarding the contemplated debt financing. Vista's draft presentations, up to and after the discovery of the share count error on October 5, 2014, based Vista's commitment amount on the implied enterprise value (approximately $4.3 billion) that had been derived from the erroneous share count. For example, a draft rating agency presentation dated October 14, 2014, stated that "[o]n September 29, 2014, Vista entered a definitive agreement to acquire TIBCO for $4.3 bn in an all-cash transaction inclusive of a refinance of TIBCO's existing $605mm of debt."
Up to and after the announcement of the transaction, Goldman similarly expressed its belief that the implied enterprise value of the Merger was $4.311 billion. For example, Goldman's September 29, 2014 "case study"—a marketing document the Goldman deal team prepared to tout the firm's services to current and prospective clients—highlighted that the Merger had an equity value of $4.244 billion, an enterprise value of $4.311 billion, and a multiple of enterprise value to latest twelve months' EBITDA of 18 times.
On Sunday, October 5, 2014, TIBCO's counsel circulated a draft of the proxy statement for the special meeting of the TIBCO stockholders to consider the Merger (the "Preliminary Proxy"), which included enterprise and equity values for the transaction based on the share count numbers set forth in the Merger Agreement. A Goldman employee reviewed the draft, and commented in an email that "[t]he aggregate value calculation doesn't look right" compared to the number that had been used in Goldman's analysis. An hour later, Goldman emailed TIBCO's counsel to discuss whether, in light of the data in the Final Cap Table, the reduced "equity value and aggregate value [in the Preliminary Proxy] should come out to a different number."
After a series of conversations between TIBCO and Goldman, it was discovered that the capitalization data that was provided to Vista (and Sponsor B) in the Final Cap Table (and its earlier versions) had double-counted 4,147,144 unvested restricted shares. Decreasing the number of the fully diluted shares (at the $24 per share offer) to account for this discrepancy had the effect of reducing the total implied equity value of the transaction by about $100 million, from approximately $4.244 billion to approximately $4.144 billion. Goldman and TIBCO allegedly did not make an immediate inquiry to determine whether Vista or Sponsor B had relied on the incorrect data.
On October 11, 2014, after the Board was informed of the share count error, it convened a special meeting to consider the situation. TIBCO management and representatives of Goldman attended the meeting, at which Goldman presented a revised analysis of the Merger with revised capitalization numbers that eliminated the double-counting in the Final Cap Table. In its analysis Goldman assumed that the per-share price would remain constant and reduced (i) the enterprise value from $4.311 billion to $4.212 billion; (ii) the equity value from $4.244 billion to $4.144 billion; (iii) and the EBITDA multiple for the Merger from 18 to 17.6 times EBITDA.
After discussions with the Board, Goldman stated that there was no change to its previous Fairness Opinion. Following Goldman's presentation, the Board concluded that the revised analysis Goldman had provided did not impact its recommendation in favor of the Merger. The Preliminary Proxy was revised to include a disclosure addressing the share count error.
On October 14, 2014, after the Board had reaffirmed its approval of the Merger, Vista was informed about the share count error when TIBCO's counsel told Vista's counsel that the equity value in the Preliminary Proxy should be reduced by $100 million. Vista was confused, as it believed that it had agreed to pay $4.311 billion, replying that it "cannot reconcile this."
On October 16, 2014, TIBCO filed the Preliminary Proxy, which disclosed information about the share count error in the "Background of the Merger" section. It also disclosed that, based on the accurate share count, the $24 per share consideration implied an enterprise value of approximately $4.2 billion, or approximately $100 million less than the $4.3 billion that the Company had initially announced.
On October 23, 2014, the Board met telephonically to further discuss the share count error. Special Committee member West stated that, at the time of the October 23 meeting, "[t]here wasn't certainty about how the error had occurred."
Plaintiff alleges that Goldman never informed the Board that, over a week earlier on October 15, 2014, Vista had acknowledged that the inaccurate share count data was built into its Final Bid, and that the absence of this information is confirmed by the minutes of the October 23 Board meeting, which state that "it was still unknown if either Vista or Sponsor B used an incorrect share count in arriving at their per share bids."
The Board did not learn that Vista had relied on the erroneous share count, and that Goldman knew that Vista had relied on the erroneous share count, until this litigation was relatively advanced. Specifically, in its brief opposing plaintiff's motion for a preliminary injunction, the Board wrote that "Goldman
On October 29, 2014, TIBCO scheduled a December 3, 2014 special meeting for stockholders to consider the Merger. The stockholders approved the Merger at that meeting, and the Merger closed on December 5, 2014.
Goldman was paid a total of $47.4 million for its services to TIBCO, about 99% of which ($46.9 million) was contingent on the closing of the Merger. Goldman's fee was 1% of the "aggregate consideration" for any transaction where common stockholders received up to $24.50 per share (with a higher-valued transaction resulting in a greater percentage fee). "Aggregate consideration" was defined in Goldman's Engagement Letter as: "[i]n the case of the sale, exchange or purchase of the Company's equity securities, the total consideration paid for such securities (including amounts paid to holders of options, warrants and convertible securities, net of the exercise price thereof)."
Plaintiff contends that Goldman should not have been entitled to any fee on the amount of the convertible notes because (i) Vista did not agree to purchase the convertible notes as part of the Merger, and thus no consideration was paid to the convertible noteholders in the Merger, and (ii) in any event, Goldman was only entitled to a fee on 1% of that amount "net of the exercise price thereof," and no noteholder received compensation exceeding the exercise price of the notes.
On October 6, 2014, the first of seven putative class action lawsuits challenging the Merger was filed in this Court. On November 5, 2014, plaintiff filed his initial complaint seeking to enjoin the closing of the Merger until the Merger Agreement was reformed to reflect an additional $100 million in consideration for the equity of TIBCO. Plaintiff also asserted, among other claims, a breach of fiduciary duty claim against the Board for failing to try to capture the $100 million for TIBCO's stockholders, and aiding and abetting claims against Vista and Goldman. On November 8, 2014, I granted plaintiff's motion for consolidation and appointment as lead counsel, and his motion for expedited proceedings.
On November 16, 2014, plaintiff filed an amended complaint, which added TIBCO as a defendant solely as a necessary party for the reformation claim, and added unjust enrichment claims against Vista and Goldman. On November 21, 2014, I heard the motion for a preliminary injunction, which was denied on November 25, 2014.
On March 10, 2015, plaintiff filed the Verified Second Amended Class Action Complaint (as defined above, the "Complaint"). In April 2015, the defendants filed motions to dismiss. On the day of argument, July 23, 2015, plaintiff voluntarily dismissed his aiding and abetting claim against Vista (Count III).
With the voluntary dismissal of Count III, six claims remain that are the subject of defendants' motions to dismiss: (1) reformation of the Merger Agreement (Count I); (2) breach of fiduciary duty against the Director Defendants (Count II); (3) aiding and abetting against Goldman (Count IV); (4) professional malpractice and professional negligence against Goldman (Count V); (5) unjust enrichment against Vista (Count VI); and (6) unjust enrichment against Goldman (Count VII).
Under Court of Chancery Rule 12(b)(6), a motion to dismiss for failure to state a claim must be denied "unless the plaintiff would not be entitled to recover under any reasonably conceivable set of circumstances."
For Count I, which alleges the existence of a mutual mistake as the basis for reformation of the Merger Agreement, Court of Chancery Rule 9(b) is implicated. It requires that "the circumstances constituting . . . mistake shall be stated with particularity." In the context of a reformation claim, Rule 9(b) requires that "the facts upon which a plaintiff relies in pleading reformation must be set forth with at least some particularity in order to put the defendant on notice of what is charged against him, but does not go so far as to require a textbook pleading or the use of specific words or phrases."
Count I of the Complaint seeks reformation of the Merger Agreement due to an alleged mutual mistake. As executed, the Merger Agreement expressly required Vista to pay $24 per share to acquire the common stock of TIBCO.
Reformation "is an equitable remedy which emanates from the maxim that equity treats that as done which ought to have been done."
A claim for reformation must be proven by clear and convincing evidence.
The Supreme Court's decision in Cerberus provides a three-part framework to analyze a claim for reformation. In Cerberus, a financial sponsor (Apollo) acquired a target company (MTI) under a merger agreement that set forth a formula reflecting the total consideration that MTI stockholders would receive: $65 million, less transaction costs, and
Applying this analytical framework, to prevail on Count I, plaintiff here must demonstrate all three of the following facts: (i) that Vista thought that the Merger would be consummated at an aggregate equity value of $4.244 billion; (ii) that TIBCO also thought that the Merger would be consummated at an aggregate equity value of $4.244 billion; and (iii) that Vista and TIBCO
In the PI Opinion, I found that plaintiff had demonstrated a reasonable probability that he could successfully prove each the first two elements of the Cerberus test, but not the third element. Specifically, as to the first two elements, I found that plaintiff had shown both "a reasonable probability that he could prove, by clear and convincing evidence, that Vista mistakenly believed it would pay $4.244 billion in total to acquire the equity of TIBCO in the Merger"
The third element is where plaintiff came up short at the preliminary injunction phase of this case. Because this element remains the heart of the dispute on the present motion, I set forth below the analysis in the PI Opinion on this element to frame the issue:
Vista, arguing on behalf of all defendants for Count I, advances two theories for dismissal of the reformation claim. The first theory is premised on standing.
Vista does not dispute the sufficiency of the allegations of the Complaint with respect to the first two of the three elements of the reformation claim. That is, Vista does not dispute that the Complaint sufficiently alleges facts demonstrating that, at the time the Merger Agreement was signed, (i) Vista thought that the Merger would be consummated at an aggregate equity value of $4.244 billion, and (ii) TIBCO had the same mistaken belief.
Plaintiff responds that "the Complaint sufficiently pleads that the parties had an agreement to complete a transaction at [an enterprise value of $4.3 billion] and [an equity value of $4.244 billion] and, due to a mutual mistake regarding TIBCO's share count, the Merger Agreement did not accurately capture those material terms of the parties' intended agreement."
Although numerous, these nine reasons have one thing in common: none of them pleads with particularity facts from which it reasonably can be inferred that Vista and TIBCO had specifically agreed before they signed the Merger Agreement that Vista would pay anything other than $24 per share to acquire the equity of TIBCO as reflected in the Merger Agreement.
Plaintiffs' nine reasons fall into essentially four categories: (1) evidence of Vista's state of mind, (2) evidence of TIBCO's state of mind, (3) the significance of the Termination Fee and Liability Cap in the Merger Agreement, and (4) statements that were made about the Merger Agreement after the fact. I address each category in turn.
The first four contentions each concern Vista's state of mind in making its per-share offer, which plaintiff contends was based on an inaccurate conception of the aggregate value Vista expected to pay to acquire TIBCO. These allegations go to show that Vista made a mistake about how much Vista thought it was bidding and thus provide evidence of the first of the three elements necessary for plaintiff to establish a claim for reformation, i.e., that Vista thought that the Merger would be consummated at an aggregate equity value of $4.244 billion. But these allegations do not demonstrate the existence of a prior understanding between Vista and TIBCO.
Plaintiff alleges, for example, that Vista relied on the inaccurate share count in the Final Cap Table in articulating its Final Bid, meaning that Vista divided the aggregate amount that it intended to pay for the equity ($4.244 billion) by an inaccurate number of shares derived from the Final Cap Table (176.8 million) to determine its Final Bid ($24 per share). Given the Complaint's allegations concerning the methodology Vista used to calculate its per-share bid and how Vista adjusted its per-share bid in reaction to the discovery of the LTIP share count error just before submitting its Final Bid, it is reasonably inferable that Vista based its Final Bid on an aggregate value of $4.244 billion divided by an inaccurate share count. But even giving full credit to these allegations, they do not support the existence of a
Indeed, virtually all the evidence plaintiff cites regarding its first four contentions was internal to Vista and never communicated to TIBCO.
Section 4.11 of the Merger Agreement states as follows:
The Equity Commitment Letter provides that Vista V has committed to contribute to Balboa "an aggregate amount up to $4,859,000,000" in cash.
In discussing Vista's expectation that it would pay $4.244 billion to acquire the equity of TIBCO, plaintiff quotes the following passage from Williston: "Legally, for there to be a mistake, there must be a discrepancy between an offeror's state of mind and his offer."
Plaintiff's fifth and sixth contentions are that Goldman opined in its Fairness Opinion that Vista's Final Bid (stated as $24 per share) equated to an implied equity value of $4.244 billion in the aggregate, and that the Board accepted that bid believing that it was approving a transaction that would yield an equity value of $4.244 billion for TIBCO's stockholders. Both of these contentions address TIBCO's state of mind. Specifically, these allegations provide evidence, as I found preliminarily in the PI Opinion, that TIBCO mistakenly believed that Vista would pay $4.244 billion in total to acquire the equity of TIBCO in the Merger when it considered Vista's Final Bid.
Plaintiff's seventh contention is that the Termination Fee and Liability Cap in the Merger Agreement "were undisputably calculated as a percentage of" an implied equity value of $4.244 billion and, therefore, it would have made no sense to include them in the Merger Agreement if the parties had intended a transaction that would result in a lower implied equity value.
Even if one assumes plaintiff has sufficiently alleged a prior understanding concerning those provisions that is inconsistent with what is stated in the Merger Agreement,
In sum, for me to find a specific prior understanding concerning the price term in the Merger Agreement, there must have been an offer by Vista to purchase all the TIBCO shares on the basis of an implied equity value of $4.244 billion, and an acceptance of such an offer by TIBCO. The Complaint, however, does not allege the existence of any such offer or acceptance.
Plaintiff's final two contentions concern events occurring after the Merger Agreement was signed, specifically (1) statements Vista, TIBCO and Goldman made internally and to third parties before the share count error was discovered reflecting that they each (mistakenly) understood the implied equity value of the transaction to be $4.244 billion,
Focusing on events occurring after the share count error was discovered, plaintiff argues that "[i]f the Merger Agreement did not contain a reformable mistake altering the effect of the parties [sic] intended agreement, Goldman would not have needed to redo its analysis or opine that the [Merger] was fair."
Taking all nine of the above contentions into account, plaintiff asserts that the facts here "are very similar" to those that caused the Supreme Court in Cerberus to find triable issues that could sustain a claim for reformation.
Here, despite having the benefit of discovery, plaintiff has failed to identify any similar evidence of a specific prior understanding inconsistent with the price term in the Merger Agreement. To repeat, the Complaint is devoid of any allegation that Vista specifically offered to pay $4.244 billion (or any other aggregate amount) for the equity of TIBCO or that TIBCO accepted any offer expressed in terms of an aggregate value. Instead, as plaintiff admits, Vista's Final Bid was expressed in terms of a per-share price of $24 unaccompanied by any express assumption about the implied equity value of that bid. The final Merger Agreement accurately reflected the per-share price Vista offered and that TIBCO accepted, and accurately reflected (in the Cap Rep) the number of TIBCO's shares outstanding on a fully diluted basis.
The first sentence of the Cerberus decision framed the issue to be analyzed as one "based upon an alleged mistake of fact in the drafting" of a merger agreement.
Count II of the Complaint asserts that the Director Defendants breached their fiduciary duties to TIBCO by failing to correct, or even to approach Vista in an attempt to correct, the share count error once it was discovered, and by failing to adequately inform themselves in the wake of this discovery. Plaintiff argues that these failures violated the Director Defendants' duty under Revlon to obtain the highest value reasonably obtainable for the Company in a change of control transaction.
In Malpiede v. Towson, the Delaware Supreme Court explained that enhanced scrutiny under Revlon does not change the nature of the fiduciary duties owed by directors:
More recently, in In re Cornerstone Therapeutics Inc., Stockholder Litigation, the Supreme Court held that where, as here, a plaintiff seeks only monetary damages, the plaintiff "must plead non-exculpated claims against a director who is protected by an exculpatory charter provision to survive a motion to dismiss, regardless of the underlying standard of review for the board's conduct—be it Revlon, Unocal, the entire fairness standard, or the business judgment rule."
The Director Defendants are exculpated from monetary liability for a breach of the duty of care under TIBCO's Certificate of Incorporation.
The standard for demonstrating that disinterested directors acted in bad faith is a high one. As the Supreme Court held in Lyondell:
In so holding, the Supreme Court quoted with approval then Vice-Chancellor Strine's observation that "[i]n the transactional context, a very extreme set of facts would seem to be required to sustain a disloyalty claim premised on the notion that disinterested directors were intentionally disregarding their duties."
Plaintiff advances two theories in support of its fiduciary duty claim, specifically, that (1) "the Board did not even attempt to recover the $100 million in consideration that Vista had agreed to pay TIBCO," and (2) the Board "failed to adequately inform itself about the circumstances of the Share Count Error and what options and strategies it had to potentially capture some or all of the $100 million."
As an initial matter, it is plainly incorrect for plaintiff to assert that Vista "had agreed" to pay the $100 million at issue in this case. The only agreement in front of the Board was the Merger Agreement, which unambiguously provided for a per-share price of $24 for a fixed—and accurate—number of TIBCO shares that implied an aggregate equity value of $4.144 billion. The real question underlying plaintiff's first theory is whether the Board's decision not to engage with Vista in an effort to recover some or all of the additional $100 million they believed the transaction would yield was so far beyond the bounds of reasonable judgment as to be inexplicable on any ground other than bad faith. In my opinion, it was not.
The obvious risk of engaging with Vista to seek to modify the Merger Agreement was that Vista might have used such an overture as an opportunity to repudiate the $24 per share transaction reflected in the Merger Agreement—one that Goldman had opined was fair (before and after the share count error was discovered), that the plaintiff himself views as a "good outcome,"
This risk calculation logically would take into account numerous factors, such as the Board's assessment of its likelihood of prevailing on a reformation claim if push came to shove, as well as dynamics in the industry or the markets at the time (such as the state of debt markets where Vista was looking to finance part of the transaction) that might influence Vista's reaction to an overture from the Board. Even if one viewed the risk of jeopardizing the transaction on the table by engaging with Vista to be minor, it was a risk that a reasonable person could not ignore, and the significance of which reasonable minds could disagree on in good faith. Given these practical realities, and the absence of any credible argument why the concededly disinterested and independent members of TIBCO's Board would be motivated to disregard their fiduciary duties, the facts pled in the Complaint do not come close in my view to demonstrating that the members of the Board intentionally disregarded their duties by failing to renegotiate with Vista.
Plaintiff's second line of attack—that the Board failed to adequately inform itself in the wake of the discovery of the share count error—presents more difficult questions. Plaintiff alleges, for example, that the Board never considered or explored a reformation claim and failed to ask Goldman such basic questions as (i) how the share count error occurred, (ii) whether it was Goldman's fault or not, (iii) whether Goldman had discussed the error or its implications with Vista, or (iv) whether Goldman believed Vista should or would pay the full $4.244 billion the Board believed it had secured for TIBCO's stockholders.
In the celebrated Disney case, this Court explained that the "fiduciary duty of care requires that directors of a Delaware corporation `use that amount of care which ordinarily careful and prudent men would use in similar circumstances,' and `consider all material information reasonably available' in making business decisions, and that deficiencies in the directors' process are actionable only if the directors' actions are grossly negligent."
Here, accepting the Complaint's well-pled allegations as true for purposes of this motion, as I must, they portray a sufficiently wide gulf between what was done and what one rationally would expect a board to do after discovering a fundamental flaw in a sale process such that it is reasonably conceivable plaintiff could meet the gross negligence standard. One rationally would expect, for example, the Board to press Goldman, which was responsible for negotiating with potential bidders and interacted directly with Vista, for a complete explanation concerning the circumstances of the share count error (e.g., what caused it, who was responsible, etc.) and for whatever information it could provide concerning Vista's understanding of the share count error. This information logically would have aided the Board in assessing, with the assistance of its counsel, the Company's options vis-à-vis Vista and/or Goldman to secure as much as possible of the additional $100 million of equity value it thought the transaction would realize.
Armed with a more complete picture of the situation, the Board would have been better equipped to consider, among other things, the risks of reengaging with Vista, of pressing a claim against Vista or Goldman, or whether to change its recommendation to stockholders before the Merger vote. What the disinterested members of the Board ultimately would do with this information presumably would be a matter of business judgment, and the failure to seek this information is not indicative of bad faith in my view for the reasons discussed earlier,
In sum, because the members of the Board were concededly disinterested and independent and the Complaint fails to plead a reasonably conceivable basis for establishing that they acted in bad faith, and because the Board is exculpated from liability for a breach of the duty of care under TIBCO's charter, Count II fails to state a claim for relief. Given, however, that the allegations of the Complaint would sustain a duty of care claim against the Director Defendants, I next address plaintiff's aiding and abetting claim against Goldman.
Count IV of the Complaint asserts that Goldman, as the Company's financial advisor, aided and abetted the Director Defendants in breaching their fiduciary duties. "To succeed on a claim for aiding and abetting a breach of fiduciary duty, Plaintiff must prove: (1) the existence of a fiduciary relationship, (2) a breach of the fiduciary's duty, and (3) knowing participation in that breach by the non-fiduciary."
"To demonstrate the `knowing participation' element of an aiding and abetting claim, it must be reasonably conceivable from the well-pled allegations that `the third party act[ed] with the knowledge that the conduct advocated or assisted constitute[d] . . . a breach [of fiduciary duty].'"?
Plaintiff asserts that Goldman, with full knowledge of the Director Defendants' duties to obtain the highest value reasonably attainable for TIBCO's stockholders, knew from its participation in the October 11 board meeting that the Board had failed to inform itself about the share count error because the Board "did not ask Goldman any relevant questions about how the error occurred or what might be done about it."
In Rural Metro, the Court, based on a careful analysis of the aiding and abetting jurisprudence of this Court dating back over forty years and principles of tort law, held that if a "third party knows that the board is breaching its duty of care and participates in the breach by misleading the board or creating the informational vacuum, then the third party can be liable for aiding and abetting."
Specifically, through its involvement in the October 11 meeting, during which the Board allegedly failed to press Goldman for basic information concerning the circumstances of the share count error, it is reasonably inferable that Goldman, a highly sophisticated investment bank, knew the Board was not fulfilling its duty of care to gather all material information reasonably available about the share count error. Most significantly, having that knowledge and having served as the primary negotiator with Vista during the bidding process, Goldman then allegedly concealed from the Board a critical piece of information: that Vista had confirmed that it relied on the erroneous share information in the Final Cap Table when it made its Final Bid.
According to plaintiff, an obvious motive for Goldman to conceal this information was its desire to protect its $47.4 million fee, almost 99% of which was contingent on the transaction closing. The Complaint further alleges that Goldman was not entitled under its Engagement Letter to $6 million of this fee amount attributable to TIBCO's convertible notes,
Goldman protests that the contingent nature of its fee cannot demonstrate a motive to aid and abet a breach of fiduciary duty because banker contingent fees are routine. It is assuredly common to pay bankers contingent fees, but that does not mean that the contingent nature of such a fee here (particularly when the level of contingency is 99%) did not provide Goldman a powerful incentive in the circumstances of this case to refrain from providing information to the Board that (i) potentially would jeopardize what Goldman likely perceived to be a "done deal" after the October 11 Board meeting at which it reaffirmed the Fairness Opinion, or (ii) may have caused the Board to seek a fee reduction (or forfeiture) from Goldman depending on its role in the share count error. These allegations, combined with alleged facts concerning the $6 million component of the fee attributable to the convertible notes and the benefit to Goldman of not acting at cross-purposes with Vista to secure that component, raise a reasonable inference at this stage of the proceedings that Goldman was motivated to create an informational vacuum.
Goldman contends that alleging it did not inform the Board that Vista relied on the Final Cap Table in making its Final Bid does not mean the Board did not infer this information from other sources, such as a spreadsheet attached to the Equity Commitment Letter or the joint press release announcing the transaction.
In sum, for the reasons explained above, I conclude it is reasonably conceivable from the facts alleged in the Complaint that Goldman was motivated to and intentionally created an informational vacuum by failing to disclose material information to the Board at a critical time when it was evaluating and reconsidering its options concerning whether it could act to secure some or all of the $100 million in additional equity value that the Board mistakenly believed it had obtained when approving the Merger.
Count V of the Complaint asserts that Goldman is liable to a putative class of TIBCO's stockholders for professional malpractice and negligence for failing to timely discover and correct the share count error as part of its financial advisory services. Plaintiff argues that this claim arises under the law of California, where TIBCO is headquartered and where the allegedly negligent services were rendered. In particular, relying on the California Supreme Court's 1958 decision in Biakanja v. Irving, plaintiff argues that "the determination of whether a professional owes a duty to third parties not in privity with the professional `is a matter of policy and involves the balance of various factors,'" which he contends weigh in his favor here.
In Biakanja, a notary preparing a will for his client failed to have it properly attested. As a result, the decedent's sister inherited only an eighth of the estate instead of the entire estate to which she would have been entitled had the will been valid. The California Supreme Court held that the notary was liable to the decedent's sister, despite a lack of privity of contract with her. The Court stated that "[t]he determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors," which include:
Applying these factors, the Biakanja Court held that, having drafted the will, the defendant should have foreseen that its faulty execution would harm the decedent's sister, and that her inability to inherit the full estate was the direct result of the defendant's negligent drafting and unauthorized practice of law.
Goldman, which does not object to the application of California law for purposes of this motion,
As to plaintiff's reliance on Biakanja, Goldman asserts that later decisions have limited its application to professionals (like contractors and architects) whose services have caused physical harm.
In 1992, in a thorough reconsideration of the policies animating its earlier decision in Biakanja, the California Supreme Court held in Bily v. Arthur Young & Co.
The Bily Court cited three central public policy concerns motivating its holding: (1) exposing auditors to negligence claims "from all foreseeable third parties" would cause "potential liability out of proportion to fault;" (2) the sophisticated investors, creditors and others who read and rely on auditors reports could "rely on their own prudence, diligence and contracting power, as well as other informational tools," to protect themselves; and (3) the "dubious benefits of a broad rule of liability" as compared to a likely increase in cost and decrease in availability services.
Following Bily, California courts have seized on that language to decline to allow third parties to sue other professional service firms. In 1997, a California intermediate court quoted that portion of Bily to hold that a law firm was not liable for negligence to a non-client, stating simply: "We assume, therefore, that the [Bily] court intended its discussion of liability of third parties to be considered in a case such as the one now before us."
The Ninth Circuit has interpreted California law to impose similar limitations on the application of Biakanja in view of Bily and later decisions. For example, in Glenn K. Jackson Inc. v. Roe, based on its examination of post-Bily precedents, the Ninth Circuit affirmed a trial court's finding that an accountant owed no duty to a third party it had audited for its client, stating that "the limitations Bily placed on the Biakanja factors apply widely to those who supply or evaluate information to limit their liability to even foreseeable third parties who have an interest in their work product."
Plaintiff has not cited any case in which a court has extended the reasoning of Biakanja to permit a third party to sue a financial advisor for malpractice. The only post-Bily decisions plaintiff has identified in which courts have sustained claims under Biakanja (against a general contractor and an architect) both involved physical damage to property.
Having carefully reviewed the cited case law, it is my opinion that California law would not afford TIBCO's stockholders standing to sue Goldman on a negligence theory for an economic loss based on the policies articulated in Biakanja over half a century ago. The post-Bily decisions rendered over the past twenty-three years suggest instead that liability for professional service firms to third parties under California law tends to be limited to instances of physical harm or property damage, rather than economic loss. This is a classic distinction in tort law, where in "situations in which the plaintiff has neither suffered personal injury nor damage to tangible property . . . American law is generally opposed to recovery on a negligence theory."
Count VI of the Complaint asserts that, because Vista paid $100 million less to acquire the stock of TIBCO than it expected to pay, it was unjustly enriched by that amount. Vista contends that this claim should be dismissed for several reasons, including because a contract—the Merger Agreement—comprehensively governs the parties' relationship in this case. I agree.
The primary case on which plaintiff relies, Great Hill Equity Partners IV, LP v. SIG Growth Equity, provides a helpful summary of Delaware law on unjust enrichment:
Here, a comprehensive agreement indisputably governs the parties' relationship in the form of the 87-page Merger Agreement, Section 2.7(a)(ii) of which sets forth the per-share price to be paid for each outstanding share of TIBCO common stock as of the effective date of the Merger. There is, perhaps, no better evidence of this than the fact that the plaintiff's lead claim in this case is to reform the Merger Agreement to increase the aggregate purchase price for TIBCO equity by $100 million, or $0.57 per share price.
Plaintiff seeks to avoid the obvious conclusion that a formal contract defines the parties' relationship by seizing on the parts of the quote from Great Hill set forth above stating that an unjust enrichment claim may survive a motion to dismiss even if a comprehensive contract is in place "[i]f the validity of that agreement is challenged" or "it is the [contract], itself, that is the unjust enrichment."
Having been unable to state a legally cognizable claim to reform or otherwise challenge the price term of the Merger Agreement, plaintiff also has failed to plead an absence of justification for Vista to expect the terms of the Merger Agreement to be honored. This would be true even if Vista did have a mistaken belief about how much it would pay for all of the equity of TIBCO when it signed the Merger Agreement. This result may seem harsh when considering notions of fairness from a 64,000 foot level, but either there is a legal basis to reform the Merger Agreement or there is not. Having found that plaintiff has failed to plead such a basis in this case, the conclusion logically follows that the comprehensive contract that governs the parties' relationship here must alone determine the measure of plaintiff's rights in this case. For these reasons, Count VI fails to state a claim for relief.
Count VII of the Complaint asserts that Goldman was unjustly enriched by at least $6 million on the theory that convertible notes of TIBCO having a face value of $600 million should not have been included as part of the "aggregate consideration" on which Goldman was entitled to a 1% transaction fee under its Engagement Letter. Application of the same principles of unjust enrichment stated above dictate that this claim be dismissed because it is undisputed that a contract signed by Goldman, TIBCO and the Special Committee—the Engagement Letter—governs this dispute. Indeed, the Complaint specifically alleges that Goldman's enrichment stems from the fact that its fee was "calculated . . . inconsistent with the terms of the Engagement Letter."
For the foregoing reasons, defendants' various motions to dismiss Counts I, II, V, VI and VII of the Complaint for failure to state a claim for relief are granted, and Goldman's motion to dismiss Count IV is denied.
In the PI Opinion, I referred to the additional per share amount attributable to the share count error as being $0.58 per share. In this opinion, I use the figure $0.57 per share as referenced in the amended pleading. See Compl. ¶¶ 2, 153.