Finjan Ruling Smooths Shareholders’ Path in Tender Offer Suits

The Ninth Circuit’s recent ruling lowers the bar for shareholders suing acquisition-target companies over financial projections and other opinions, opening a favorable path for plaintiffs and hardening a split among appeals courts.

The Jan. 20 decision in Grier v. Finjan Holdings said shareholders only have to show negligence—not intent to defraud, or scienter—when suing companies for allegedly false “opinions,” such as revenue projections, given during a public offer to buy their shares.

Many shareholders that sue companies in connection with such tender offers focus on company advisers’ opinions that evaluate the fairness of the offered price. Showing there was an ...