Justia Contracts Opinion Summaries

This case arose when Del Monte Foods Company announced that it had agreed to be acquired by a consortium of Kohlberg Kravis Roberts & Co. L.P., Vestar Capital Partners, and Centerview Partners (collectively, Sponsors). A number of familiar entrepreneurial plaintiffs' firms filed putative class actions challenging the merger. Plaintiffs subsequently sought an interim award of attorneys' fees and expenses for causing defendants to issue supplemental disclosures and obtaining a preliminary injunction. The court held that the application for an interim fee award was granted with respect to benefits conferred by the Proxy Supplement. For those benefits, Lead Counsel was awarded fees and expenses of $2.75 million. Therefore, the court held that the application was otherwise denied without prejudice and could be renewed at a later time.

This lawsuit stemmed from a failed venture between OverDrive, Inc. (OverDrive), a leader in the field of digital media distribution, and Baker & Taylor, Inc. (Baker & Taylor), a leading distributor of physical media, where OverDrive alleged numerous claims against Baker & Taylor contending that Baker & Taylor breached its exclusive distribution agreement with OverDrive and that it was disclosing OverDrive's proprietary trade secrets and confidential information. The court held that OverDrive's conversion, fraud, and "Breach of Contract - Exclusivity and Non-Compete Provisions" claims survived, as did OverDrive's claims for misappropriation of trade secrets and "Breach of Contract - Confidentiality Obligations", which were not challenged in this motion. The court held, however, that all other counts in OverDrive's complaint were dismissed.

This matter involved a stockholder challenge to a merger in which a third-party strategic aquiror had agreed to merge with the target corporation for consideration valued at $35 per share. Plaintiffs moved for a preliminary injunction and requested that the court delay the target's stockholder vote and enjoin the deal protections for a period of 45-60 days so as to allow the target to seek higher bids. The court first addressed the issue of whether and in what circumstances Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc. applied when merger consideration was split roughly evenly between cash and stock. Based on its analysis, the court held that plaintiffs were likely to succeed on their argument that the approximately 50% cash and 50% stock consideration triggered Revlon. Therefore, when the board explored whether to enter into the proposed transaction, which warranted review under Revlon, its fiduciary duties required it to obtain the best value reasonably available to Smurfit-Stone stockholders. The court held, however, that plaintiffs failed to carry their burden to prove they were likely to succeed on the merits of their claims, would suffer imminent irreparable harm in injunctive relief was not granted, and were favored by the equities. Accordingly, plaintiffs' motion for a preliminary injunction was denied.