Securities /SHAREHOLDER RIGHTS / PARTNERSHIP ROLLUP

 

The firm, a member of Risk Metrics top 50 securities firms, has been involved in complex corporate shareholder and takeover litigations, especially in cases involving truly complex valuation issues.  These cases include:

         (a)     Options Backdating.  In Ryan v. Gifford, 918 A.2d 341 (Del. Ch. 2007) we obtained the Delaware Chancery Court’s definitive declaration that backdating option grants violates directors’ fiduciary duties to shareholders.  The litigation also produced landmark Delaware decisions regarding personal jurisdiction, discovery issues in derivative litigation and interlocutory appeal issues.  On January 2, 2009, the Delaware Chancery Court approved a settlement of $28 million in cash plus option givebacks and unique and unprecedented corporate governance reforms

 

         (b)     In re Nationsbank/BankAmerica Securities Litigation, MDL 1264 (E.D. Mo., Nangle, DJ) (Executive Committee counsel in litigation involving $100 Billion bank “merger of equals” between Bank of America and Nationsbank which was shaken by post-merger disclosures of hedge fund losses) (significantly participated in achievement of $490 million settlement of all constituent claims), 263 F.3d 795 (8th Cir. 2001);

 

         (c)     In re Prudential-Bache Energy Income Partnerships Securities Litigation, MDL No. 888 (E.D. La.), (lead Objectors' counsel, forced the disclosure of Prudential’s internal “Locke Purnell” audit showing truly corrupt actions in selecting partnerships to “pump” through the Pru sales force, blocked an early-stage low cash rollup settlement, forced an auction and found the high-bid purchaser who ultimately paid $508 million for the auctioned partnerships, and ultimately initiated global Prudential Securities litigation and settlement.);             

 

         (d)    Massad v. Prudential Insurance Co. (global Civil RICO case against Prudential Securities initiated from knowledge gathered in Prudential partnership litigation case; became the global civil RICO case referred to as In re Prudential Securities, Inc. Limited Partnerships Litigation, MDL No. 1005 (S.D.N.Y.), which produced more than $110 million cash for all of Prudential’s  limited partnership unit-holders nationwide, see also 163 F.R.D. 200 (S.D.N.Y. 1995) (preliminary approval) and 912 F. Supp 97 (S.D.N.Y Jan. 24, 1996) (award of fees following final approval));

 

         (e)     In re DVI, Inc. Securities Litigation, 2:03-cv-5336 (E.D. Pa.) (Recovered over 60% of PSLRA losses for class over more than ten years representing institutional investors.  We were appointed by the court as sole lead and class counsel on behalf of both equity and debt securities purchasers in securities fraud litigation involving the collapse and bankruptcy liquidation of a $2 billion medical equipment finance company.  We overcame numerous legal challenges, reviewed millions of documents, took over seventy depositions, retained and challenged numerous experts on issues of market efficiency, accounting and auditing matters, loss causation and damages, obtained class certification, which the Third Circuit Court of Appeals affirmed; prevailed on summary judgment motions, and recovered over $21 million from certain inside and outside directors, paid from their own personal funds, certain third-parties and one of the company’s largest shareholders; plus obtained $2.2 million additional recovery from the company’s auditors and certain directors and officers).  Notable reported decisions in this case include: In re DVI, Inc. Sec. Litig., 249 F.R.D. 196 (E.D. Pa. 2008) (granting plaintiffs’ motion for class certification against all but one defendant), aff’d, 639 F.3d 623 (3d Cir. 2011) (rejecting defendants’ challenges to the adequacy of lead plaintiffs based on their trading strategies and the efficiency of DVI’s stock and bond markets); In re DVI, Inc. Sec. Litig., 2005 WL 1307959 (E.D. Pa. May 31, 2005) (denying defendants’ motions to dismiss); and Janovici et al. v. DVI, Inc. et al., 2003 WL 22849604 (E.D. Pa. 2003) (appointing our client as lead plaintiff and our firm as lead counsel over the objection of applications filed by larger class action firms).

 

         (f)     In re Safety-Kleen Rollins Shareholder Litigation, 3:00-1343-17 (D. So. Carolina, Judge Joseph F. Anderson, Jr.) (co-lead counsel) (survived motions to dismiss and summary judgment, obtained class certification and, in 2005, obtained recoveries totaling 100% of PSLRA losses.  Entered into settlements totaling $3.15 million in action asserting § 14(a) proxy claims on behalf of former Rollins shareholders; settlement represented a substantial recovery of class member estimated losses).

 

         (g)     In re First Chicago Shareholder Securities Litigation, (N.D. Ill.) (Executive Committee member in action asserting § 11, 12(a) and 14(a) claims brought on behalf of First Chicago Shareholders in connection with Bank One Merger; action settled in 2005 for $120 million);

 

         (h)     Mercury Finance Company Securities Litigation, (cooked book finances of subprime auto lender, Krislov firm helped organize diverse groups of competing claims and counsel in federal and state court, bankruptcy court and outside arbitration, ultimately designated lead counsel for state court claimants in both state and federal courts, bankruptcy and arbitration matters, instrumental in achieving multi-court settlements and arbitration of claims resulting in multi-million dollar recovery to the Class);

 

         (i)      Malone v. Brincat, 722 A.2d 5 (Del. Sup. 1998), establishing actionable director duties of full disclosure to shareholders;

 

         (j)      Gavin v. AT&T Corp., 464 F.3d 634 (7th Cir. 2006).  Corporation charged shareholders for delivery of stock certificates in connection with a merger when shareholders could have obtained certificates for free. The Seventh Circuit Court of Appeals reversed the district court’s dismissal, pursuant to the Securities Litigation Uniform Standards Act, because the exchange of stock certificates was not sufficient in connection with the merger that caused the stock certificate exchange. The Seventh Circuit remanded the case to the Circuit Court of Cook County, Illinois, and the case was subsequently settled);  

 

         (k)     In re Jacuzzi Brands S’holder Litig., C.A. No. 2477-CC, (Del. Ch.): on executive committee to achieve settlement based on corporate therapeutics and reduction in the termination fee in connection with Apollo Management Co.’s takeover of Jacuzzi;

 

         (l)      Ryan v. John H. Harland Co., No. 2007CV128712 (Fulton Cty. GA): lead counsel in achieving meaningful disclosure settlement in connection with its takeover by M&F Worldwide Inc.; and

 

         (m)    Smith v. The ServiceMaster Co., C.A. No. 2924-VCS (Del. Ch.): lead counsel in achieving therapeutic settlement in connection with Clayton Dubilier & Rice’s takeover of The ServiceMaster Company.

 

Pending Delaware Chancery matters 2022:

 

         1)      Buckeye Partners, L.P.

         2)      Maxim Integrated Products

         3)      Boeing Derivative Litigation

 

Partnership Rollup Litigation

Krislov & Associates earned a nationwide reputation for contesting unfair "rollup" transactions in which limited partnerships are consolidated into new listed corporate entities in which existing management obtains an unfair proportion of the surviving entity.  Krislov has been lead or co-lead counsel in cases in Delaware, Preim v. Franchise Finance Corp. of America, C.A. No. 13192 (Del. Ch.) (reduction of management share in $900 million rollup); in Louisiana, In re Prudential-Bache Energy Income Partnerships Securities Litigation, MDL No. 888 (forced $500 million auction plus improved $120 million settlement); and in California, Blumberg v. Glenborough Realty Corp., No. 391223 (Cal. Super. Ct. San Mateo Co.) ($100 million real estate rollup).

© 2011 Krislov & Associates, Ltd. All Rights Reserved.

www.krislovlaw.com | Tel: 312.606.0500