This Week in Chancery Court: WinView, Inovalon, and Byju’s Alpha

Negotiations to settle litigation challenging WinView Inc.'s merger with Engine Media Holdings Inc. appear to have stalled, according to documents filed in Delaware’s Court of Chancery.

A status conference on the lawsuit filed by WinView’s founders is among the highlights from the court’s calendar this week:

Monday: City of Sarasota Firefighter Pens. Fund v. Inovalon Holdings Inc., Del. Ch., No. 2022-0698, bench ruling 7/31/23.

At issue: Three pension funds sued Inovalon Holdings Inc. last year, alleging its leaders steered the health analytics company into a $7.3 billion private equity sale that favored insiders while obscuring conflicts of interest and superior offers. Chancellor Kathaleen St. J. McCormick heard arguments regarding motions to dismiss the litigation in early April. The lawsuit initially included former board member André Hoffmann, whose family controls pharmaceutical giant Roche Holding AG, among the defendants, but the claims against him were voluntarily dismissed.

Court action: Phone hearing for a bench ruling on motions to dismiss.

Inovalon Sued by Funds Over $7.3 Billion Private Equity Sale

Monday: In re Emisphere Tech Inc S’holders Litigation, Del. Ch., No. 2021-0025, bench ruling 7/31/23.

At issue: A group of former Emisphere Inc. shareholders sued the company’s ex-board and affiliates of MHR Fund Management LLC in January 2021, claiming they pushed its $1.8 billion sale to Novo Nordisk AS on terms that favored private equity insiders over public investors. Vice Chancellor Nathan Cook previously granted in part a motion to compel discovery from MHR principal Mark Rachesky. The dispute stems from a Dec. 8 deal with Novo that included a $1.35 billion payment to all investors and a separate $450 million for MHR, Emisphere’s controlling stockholder, to buy back royalty rights related to Novo’s Rybelsus, a diabetes drug that uses Emisphere technology.

Court action: Phone hearing for a bench ruling on partial motions to dismiss.

MHR Fund Targeted Over Novo Nordisk’s $1.8 Billion Emisphere Buy

Wednesday: SIIS Holdings LTD v. Samumed LLC, Del. Ch., No. 2023-0255, phone hearing 8/2/23.

At issue: Magistrate in Chancery Selena Molina oversaw a trial last week in which banker Kamel Lazaar sought internal files from the parent company of Biosplice Therapeutics Inc. to investigate allegations that a private equity executive at Singapore-based Vickers Venture Partners duped him about an affiliate’s financial backers and partnerships with major pharmaceutical companies. Such books-and-records cases often reflect an attempt to drum up fiduciary breach claims. Billionaire Osman Kibar, who founded Biosplice, told Lazaar that he had tried to sideline the Vickers executive for “misrepresenting right and left” to potential investors, according to the complaint.

Court action: Molina scheduled a phone hearing to deliver a post-trial ruling.

Turkish Billionaire’s Biotech Firm Accused of ‘Scam’ by Banker

Thursday: Lockton v. Rogers , Del. Ch., No. 2021-0058, teleconference 8/3/23.

At issue: Vice Chancellor Sam Glasscock III previously allowed WinView’s founders to proceed with litigation over increasingly harsh financing rounds involving former members of its board that were followed by a merger into Engine Media Holdings that allegedly forced them out of the business. In that 2022 opinion, Glasscock said it was plausible the ex-directors abused their control over the mobile sports betting technology company to arrange a merger on terms favoring their interests as creditors, at the expense of stockholders like the founders, though he did throw out the lawsuit’s civil conspiracy claims and a fiduciary breach count against WinView’s largest stockholder at the time. Earlier this year, the parties announced they would settle the case, but those efforts may have stalled. A July 19 letter from the founders’ attorneys requesting a status conference said, “It is now over three months later, and final documentation has not been completed. At this point, Plaintiffs are uncertain that the matter can be resolved amicably.”

Court action: Status conference by phone.

WinView Founders Advance Challenge to Sports Betting Tech Merger

Friday: GLAS Trust Company v. Ravindran, Del. Ch., No. 2023-0488, trial 8/4/23.

At issue: Lenders have accused one of India’s hottest tech companies, Byju’s Alpha, of hiding $500 million as part of a fight between creditors and the self-proclaimed biggest education technology company in the world. Byju’s Alpha faces a lawsuit over who should control the company, as lenders claim that because of a default earlier this year, they have the right to put their representative, Timothy R. Pohl, in charge. The lawsuit filed in May by GLAS Trust Company targets Byju’s Alpha’s director, Riju Ravindran, and Tangible Play Inc. The two companies being sued are units of Think and Learn Private, the edtech empire founded by Byju Raveendran.

Court action: Trial in Wilmington, Del.

Byju’s Alpha Accused of Hiding $500 Million From Lenders (1)