The Competitive Enterprise Institute’s Center for Class Action Fairness filed the opening brief in an appeal of a “disclosure-only settlement” stemming from the 2015 merger between Pharmacyclics and AbbVie. As in the vast majority of “strike suits” filed in the wake of nearly every merger of large public companies, the settlement provided over a half million dollars to plaintiffs’ attorneys in fees and costs and nothing but worthless disclosures to shareholder class members.
On behalf of shareholder Sean Griffith, CEI asked the California’s Sixth District Court of Appeal to overturn approval of the settlement and adopt the Delaware Court of Chancery’s landmark Trulia holding to end the “merger tax” that plaintiffs’ attorneys impose in the form of attorneys’ fees.
“Once again, shareholders are being unfairly asked to pay more than half a million dollars in attorneys’ fees in exchange for disclosures containing no new material information,” said Ted Frank, CEI’s director of litigation and the Center for Class Action Fairness. “As long as courts continue to approve settlements that provide no material benefit to the shareholder class while costing shareholders hundreds of thousands of dollars in attorneys’ fees, dockets will continue to be filled with merger challenges regardless of their merits.”
In the original class action challenging the merger, plaintiffs alleged self-dealing and breach of fiduciary duty claims against the defendants.
ABOUT: CEI’s Center for Class Action Fairness (CCAF) represents class members against unfair class action procedures and settlements. Since 2009, the center has secured millions of dollars for consumers and shareholders, winning landmark precedents that safeguard consumers, investors, and the courts.