Tuesday: Farzad v. Trasimene Capital FT LP II, Del. Ch., No. 2023-0193, oral argument 1/30/24.
At issue: Foley faces investor litigation over claims he made a killing steering a shell company, Foley Trasimene Acquisition Corp. II, into a “horrific” blank-check merger with Paysafe Ltd. The dispute is part of an ongoing wave of litigation prompted by blank-check mergers that give private businesses a shortcut to capital markets by combining them with a publicly traded shell entity, called a special purpose acquisition company.
Foley wants the case dismissed, arguing in a brief that it’s nothing like other SPAC litigation cited by the investors because there were no disclosure violations that might have interfered with the SPAC stockholders’ decisions about redeeming their shares.
In an answering brief, the investors say Foley and other defendants “have no viable authority stating that an unjust enrichment claim is not an appropriate avenue for redress against fiduciaries who pocketed over $127 million through breaches of their duties to stockholders.”
Court action: Oral arguments on the motion to dismiss will be heard in Wilmington, Del.
Billionaire Bill Foley Accused of Pushing ‘Horrific’ SPAC Deal
Wednesday: IMG Holding LLC v. Dimon, Del. Ch., No. 2023-0522, oral argument 1/31/24.
At issue: Dimon and the other JPMorgan directors argue that the investor’s May 2023 complaint “fails to plead any facet of an oversight claim,” and it “does not, and cannot, meet the very high standard of adequately pleading ‘extreme events’ and ‘egregious’ bad faith conduct” that would subject them “to a substantial likelihood of personal liability,” according to a brief supporting their motion to dismiss.
The investor argues in an answering brief that failures by Chase Bank NA, a JPMorgan subsidiary, to reimburse victims of unauthorized electronic transfers violate federal law, and the board “has consciously failed to take any action to stop the Bank’s continued violations.”
Court action: Oral arguments on the motion to dismiss will be heard in Wilmington, Del.
Dimon, JPMorgan Board Sued for Zelle Fraud Claims Response (1)
Wednesday: Salazar v. Solera Nat’l Bancorp, Del. Ch., No. 2023-0959, trial 1/31/24.
At issue: An investor sued in September to access internal files from Solera National Bancorp over concerns that its executive chairman—who portrays himself on TikTok as “the red pant man"—spent corporate funds buying a fleet of private jets to fly around the country attending NBA games.
Shareholder records cases often reflect an attempt to drum up fiduciary breach claims for future litigation. The lawsuit seeks documents to investigate allegations that Michael Quagliano, who owns a majority stake of Solera, has exploited his control by pushing it to spend tens of millions on five planes and a helicopter. Quagliano, who’s not named as a defendant, has referred to the allegations as “salacious” and “misinformed.”
Noteworthy: Videos posted to Quagliano’s TikTok account show him wearing red pants in arenas and boarding aircraft while hyping the Denver Nuggets, the 2023 NBA champions. He told Bloomberg Law in September that positioning the bank as a Nuggets booster had turned out to be a boon to the business. “Quite frankly, the red pants man is doing a lot more loans and taking in a lot more deposits,” he said in an interview.
Court action: One-day trial in Dover, Del.
Bank Chairman Misspent Assets Flying to NBA Games, Suit Says (1)
Thursday: Mehra v. Teller, Del. Ch., No. 2019-0812, trial 2/1/24.
At issue: Chancellor Kathaleen St. Jude McCormick ruled in 2021 that the dissolution of EOS Investor Holding Company LLC was valid. Then, early last year, she allowed an ex-manager of the the lip balm maker to advance claims that another executive wrongfully seized control of the business after the dissolution of its parent company over a leadership deadlock.
Sanjiv Mehra, the plaintiff, argues in a pre-trial brief that he has been pressured “to accept less than his contractual share” throughout the long-running litigation. Jonathan Teller, the defendant, said in his own pre-trial brief that there’s no evidence to support claims that he breached a contractual agreement or his fiduciary duty.
Court action: A two-day trial will be held in Wilmington, Del.
EOS Executive Must Face Claims of Breach of Duty, Judge Says
Thursday: Harper v. Sievert, Del. Ch., No. 2022-0819, oral arguments 2/1/24.
At issue: A T-Mobile US Inc. investor sued its board in 2022, claiming a plan by corporate parent
Jenna Harper, the investor, argues the “scheme to centralize and exfiltrate data from T-Mobile was perpetrated for the sole purpose of enriching” Deutsche Telekom, according to a brief.
The defendants include T-Mobile’s CEO, Michael Sievert. They argue the case should be dismissed because Harper’s “elaborate theory that T-Mobile’s largest stockholder, DT, supposedly forced T-Mobile to centralize its customer data—and compromise its data security—for DT’s own benefit is wholly unsupported by the well-pleaded facts,” according to a reply brief.
Court action: Oral arguments on the motion to dismiss will be held at Widener University’s Delaware Law School in Wilmington, Del.
T-Mobile Breaches Blamed on AI Project in Investor Lawsuit (1)
Friday: United Inv. Holdings LLC v. Synergy Health Partners Holdings LLC, Del. Ch., No. 2023-0561, oral argument 2/2/24.
At issue: A former senior executive at Synergy Health Partners Holdings LLC sued the orthopedic practice in May 2023 for ousting him after he was indicted on federal conspiracy charges involving an alleged chiropractic kickback scheme.
Synergy Health seeks to dismiss the complaint, or at least stay the proceedings, arguing in a brief that almost all of plaintiff Cory Mann’s claims are contingent upon arbitration that’s currently pending.
Mann said in an answering brief that his claims fall under Synergy Health’s operating agreement, which is governed by Delaware law, not his employment agreement, which contains an arbitration provision under Michigan law. Mann also said a wire fraud charge from the 2020 indictment has been dismissed by the federal court, and wire fraud charges from a separate 2022 indictment also have been dismissed. Both cases remaining pending before US District Court for the Eastern District of Michigan.
Court action: Oral arguments on the motion to dismiss will be heard in Wilmington, Del.
Indicted Health Care Executive Sues Over Medical Practice Ouster
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