Two groups of pension funds are competing in Delaware’s Court of Chancery for leadership in litigation blaming Rupert Murdoch and other Fox Corp. senior leaders for the consequences of lies Fox News broadcast about the 2020 election, including potentially billions of dollars in liability. Their attorneys face off this week before Vice Chancellor J. Travis Laster, who consolidated separate lawsuits filed before and after the conservative news network announced a $787.5 million defamation settlement with Dominion Voting Systems Inc.
Monday: Delman v. Riley, Del. Ch., No. 2023-0293, hearing 11/6/23.
At issue: Eos Energy Enterprises Inc., formerly known as B. Riley Principal Merger Corp. II, renamed itself after merging with the energy storage firm Eos Energy Storage LLC in November 2020. Stockholders sued the energy storage company’s board of directors in March this year, alleging they misled investors when bringing the corporation public through a SPAC merger. The directors argue the case is different from other de-SPAC cases. “Here, by contrast, Plaintiff’s disclosure claims are not reasonably or logically linked to any harm, because Eos’s stock price increased after the Merger and continued to trade significantly above the redemption value for a year after the Merger, even after purportedly corrective information entered the market,” they said in a brief.
Court action: Hearing on motion to dismiss in Wilmington, Del.
Energy Storage Stockholder Sues SPAC Board Alleging Deceit
Monday: Fairstead Capital Management LLC v. Blodgett, Del. Ch., No. 2022-0673, oral arguments 11/6/23.
At issue: Laster previously sided with Fairstead Capital Management, ordering that the real estate business and its co-founder, William Blodgett, must litigate their dispute that centered on Blodgett’s claims from both employment and operating agreements. The judge in a Jan. 6 opinion said the claims for breach of the operating agreement must be litigated in the Delaware court because they were executed after the employment agreement. But any disputes over whether Blodgett breached his employment agreement were for the arbitrator to decide. Blodgett now seeks to dismiss the company’s amended complaint.
Court action: Oral arguments in Wilmington, Del., on motion to dismiss.
Chancery Sides With Real Estate Business in Dispute ‘Collision’
Tuesday: Handler v. Centerview Partners Holdings LP, Del. Ch., No. 2022-0672, oral arguments 11/7/23.
At issue: A former deal-maker at Centerview Partners Holdings LP, David Handler, filed a lawsuit in August 2022 on the same day he left to start a competing firm, over claims that the investment bank wrongfully refused to recognize their decade-old “oral partnership agreement” with him. Since then, Handler has moved to sanction Centerview, which has filed a motion for judgment on the pleadings. A three-day trial was held in July over whether Handler was a limited partner at the firm.
Court action: Hearing in Georgetown, Del., for arguments on a motion for judgment on the pleadings, arguments on a motion for sanctions, and post-trial arguments.
Centerview Partners Ex-Banker Sues Firm on His Way Out Door (2)
Tuesday: SPay Inc. v. P. Jeffrey Lucier Trust & Gravitas Securities Inc., Del. Ch., No. 2020-0540, bench ruling 11/7/23.
At issue: Stack Sports, which runs payment and logistics software platforms for sports leagues, claimed in a 2020 lawsuit that it was duped into acquiring Stack Media Inc. in 2017 by its founders, who fraudulently concealed dependence on a single large customer, mobile advertising company, Mundo Media. The court dismissed claims against Stack Media and its ex-CEO this year, and Vice Chancellor Nathan Cook heard arguments regarding a motion to dismiss the claims against the remaining defendants, including Canadian investment bank Gravitas Securities Inc., in early July.
Court action: Cook will deliver a bench ruling by phone.
Stack Sports Hits Stack Media With Fraud, Theft Suit Over Merger
Wednesday: Palkon v. Maffei, Del. Ch., No. 2023-0449, oral arguments 11/8/23.
At issue: TripAdvisor’s planned move allegedly is aimed at reducing the company’s potential liability to shareholders. The lawsuit targets TripAdvisor chairman
Court action: Oral arguments in Wilmington, Del., on the motion to dismiss.
TripAdvisor’s Planned Nevada Move Puts Delaware in Tricky Spot
Wednesday: Agspring Holdco LLC v. NGP X US Holdings, Del. Ch., No. 2019-0567, hearing 11/8/23.
At issue: The court ruled in 2020 that fraud claims could proceed against private equity firm NGP X US Holdings LLP and the founders of grain elevator company Agspring LLC in a case stemming from a $300 million buyout of membership interests, but a judge hit pause on the litigation in January 2022 over pending resolution of Agspring’s advancement obligations. Now that Agspring has filed for bankruptcy and action seeking to enforce an advancement judgment has been tabled, Agspring wants to restart the Chancery Court case. The private equity firm says that motion “exemplifies the inequitable conduct that led this Court to enter the stay in the first place,” according to their own brief.
Court action: Oral arguments via video conference on plaintiffs’ motion to lift the stay.
Private Equity Firm Must Face Fraud Claim Over $300 Million Deal
Thursday: In re Fox Corp. Derivative Litig., Del. Ch., No. 2023-0418, hearing 11/9/23.
At issue: Laster will decide who should be the lead plaintiff in the Fox litigation: public pension funds for New York City and the state of Oregon, or a competing group of pension and investment funds, including one representing workers in Rhode Island and another run by Sweden. The four separate lawsuits being combined involve shareholder derivative claims, which are brought on a company’s behalf against its leaders. Any damages awarded by Laster or in a settlement would be paid into Fox’s corporate coffers by Murdoch and the others, or by their insurers. The law firms representing the group chosen as lead plaintiff also stands to take home a potentially massive payday.
Court action: Hearing in Wilmington, Del., to consider applications for leadership in the consolidated case.
Murdochs Blamed by NYC Pension Funds for Fox Defamation Scandals
Thursday: Visnic v. Seegrid Corp., Del. Ch., No. 2022-0202, bench ruling 11/9/23.
At issue: Former Seegrid Corp. employees alleged the robotics business lured them with the promise of equity, then rewrote the terms of their investments as the company’s value skyrocketed so that board members and their affiliates could buy out the workers at a bargain. The March 2022 lawsuit concerns an incentive plan the company allegedly adopted after emerging from bankruptcy in 2015 as a Giant Eagle Inc. subsidiary. A motion to dismiss filed by Seegrid’s senior leaders call the plaintiffs “six former disgruntled, at-will employees” who were “disappointed” the company decided to exercise its contractual rights. Cook considered that motion, along with the plaintiffs’ response, in a July 26 hearing.
Court action: Cook will deliver a bench ruling by phone.
Seegrid Corp. Accused by Ex-Employees of Scheme to Seize Equity
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