This Week in Chancery Court: Wells Fargo Books and Records

Wells Fargo & Co. goes to trial in Delaware’s Court of Chancery this week over a Florida pension fund’s demand for files about a possible criminal probe into allegedly fake job interviews.

Here’s a look at the other trials and hearings on the court calendar this week:

Monday: Logan v. Salix Pharmaceuticals Ltd., Del. Ch., No. 2019-0059, trial 9/11/23.

At issue: The former chief executive officer of Salix Pharmaceuticals Ltd. sued the company and its parent, Bausch Health Cos. Inc., in 2019 to recover stock awards she says were wrongfully denied. Bausch Health was voluntarily dismissed as a defendant shortly after the lawsuit was filed. Carolyn J. Logan, who led Salix from 2002 through 2014, is expected to testify during trial this week. Pre-trial arguments from both Salix and Logan remained sealed on Friday, but in a 2021 filing answering Logan’s amended complaint, Salix alleged that she intentionally engaged in wrongdoing that “wiped out millions in shareholder value and led to litigation and regulatory actions that cost hundreds of millions in fees and settlement payments.”

Court action: Four-day trial begins Monday in Georgetown, Del.

Ex-Salix CEO, Denied Millions in Stock Awards, Sues to Recoup

Monday: InterMune Inc. v. Harkonen, Del. Ch., No. 2021-0694, trial 9/11/23.

At issue: Vice Chancellor Nathan Cook ruled earlier this year that the founder of Roche Holding AG subsidiary InterMune Inc., who was convicted of wire fraud, isn’t entitled to have his legal fees covered thanks to a pardon from former President Donald Trump. That decision closed one chapter of InterMune’s sprawling, long-running dispute with W. Scott Harkonen, but there are still some issues to be decided at trial. The dispute began in 2002, when Harkonen was charged with fraud for falsely hyping the results of an autoimmune drug’s clinical trial in a press release.

Court action: One-day trial in Dover, Del.

Roche Beats Legal Fee Bid Over Trump Pardon of InterMune Founder

Wednesday: Pompano Beach General Employees Retirement System v. Wells Fargo & Co., Del. Ch., No. 2023-0656, trial 9/13/23.

At issue: The Florida pension fund’s demand for documents is tied to news reports that federal prosecutors are investigating Wells Fargo over claims managers in its wealth-management division arranged job interviews for Black and female candidates for positions that were already filled as a way to meet corporate diversity guidelines. The books-and-records action seeks documents that could be used in potential lawsuits against Wells Fargo executives or directors for allegedly breaching their duties to investors.

Court action: One-day trial in Dover, Del.

Wells Fargo Investor Seeks Fake-Job Interviews Probe Files (1)

Wednesday: City of Pittsburgh Comp. Mun. Pension Trust Fund v. Conway, Del. Ch., No. 2022-0664, hearing 9/13/23.

At issue: A pension fund sued Carlyle Group Inc.'s senior leaders last year, challenging a $344 million payment to the private equity firm’s founders in connection with the end of tax agreements they reached when taking the asset manager public. “Many of the claims are erroneously directed at directors and officers of a corporation for decisions actually made by a general partner of a limited partnership in accordance with the terms of the limited partnership’s agreement,” the defendants said in their amended complaint. They added that some claims “rely on misinterpretations of contracts or provisions of the General Corporation Law,” while “the derivative claims seek to proceed on a theory of demand futility, even though a majority of the current Carlyle board of directors are disinterested in the claims.”

Court action: Motion to dismiss hearing in Wilmington, Del.

Carlyle Group Board Sued Over $344 Million Payment to Founders

Wednesday: Goldstein v. Denner, Del. Ch., No. 2020-1061, hearing 9/13/23.

At issue: Vice Chancellor J. Travis Laster will consider whether to approve a proposal for Sanofi SA affiliates to pay $84 million to partially settle investor litigation over claims they helped a billionaire hedge funder make tens of millions on insider trades by manipulating the $11.6 billion acquisition of Bioverativ Inc. The plaintiffs also propose an attorneys’ fee award of 25% of the settlement fund and an incentive award of $50,000 for the investor leading the lawsuit, according to a brief. The deal doesn’t include Sarissa Capital Management LP or its chief, Alex Denner, who both expect to face trial in 2024 on claims alleging a breach of fiduciary duty.

Court action: Settlement hearing in Wilmington, Del.

Sanofi, Bioverativ Exit $12 Billion Merger Case for $84 Million

Friday: Meehan v. Tiger Analytics Inc., Del. Ch., No. 2023-0720, trial 9/15/23.

At issue: A Tiger Analytics Inc. shareholder sued the company in July, seeking books and records to show the company improperly diluted his interest by issuing shares. Edward Meehan Jr., who says he worked on business development for the company, alleged Tiger Analytics diluted the company’s stock and didn’t give him notice as required by a 2013 agreement. In 2021, the company allegedly told Meehan his stake in the company had dropped to 4.1% from 8.2% and asked him to repurchase over two million units using a loan from the company, according to the complaint. According to a pre-trial brief filed by Tiger Analytics, the company has complied with the records demand and “the only remaining issue in dispute is the question of whether Plaintiff is entitled to his attorneys’ fees.”

Court action: One-day trial in Dover, Del.

Tiger Analytics Wrongly Diluted Shareholder Interest, Suit Says