Southern District of New York

G&E represented a public service union in litigation against insurance giant American International Group, Inc. (“AIG”).  The plaintiff was seeking to compel AIG to include a proxy access proposal in the company’s proxy statement pursuant to SEC Rule 14a-8. Long considered a primary goal of corporate governance reform, proxy access would require corporations to publish the names of director candidates nominated by shareholders in the corporation’s proxy statement. The Second Circuit’s decision in favor of G&E’s client in this case reversed several years of no-action letters from the Securities and Exchange Commission’s Division of Corporation Finance that had effectively prevented shareholders from installing proxy access regimes at their corporations. This decision renewed the debate on the merits of proxy access that had stagnated following the Securities and Exchange Commission’s failure to adopt a mandatory rule in 2004, and confirmed that shareholders have an existing right under the federal securities laws to propose bylaw amendments to require their companies to publish the names of shareholder-nominated candidates.

Delaware Chancery Court

G&E represented a group of institutional shareholders challenging the merger agreement between Chicago Board of Trade and the Chicago Mercantile Exchange. After extensive and expedited discovery, G&E negotiated important changes to the announced transaction that resulted in an additional $485 million being paid to the shareholders of the acquired corporation.

Northern District of Texas

In one of the earliest cases filed after the enactment of the Private Securities Litigation Reform Act (“PSLRA”), a large public pension fund was designated lead plaintiff and G&E was appointed lead counsel in an opinion that is widely considered the landmark on standards applicable to the lead plaintiff/lead counsel practice under the PSLRA. (See, especially, In re Cendant Corp. Litigation, 2001 WL 980469, at *40, *43 (3d Cir. Aug. 28, 2001), citing CellStar.) After the CellStar defendants’ motion to dismiss failed and a round of discovery was completed, the parties negotiated a $14.6 million settlement, coupled with undertakings on CellStar’s part for significant corporate governance changes. With the plaintiff’s active lead in the case, the class recovery, gross before fees and expenses, was approximated to be 56% of the class’s actual loss claims, about 4 times the historical 14% average gross recovery in securities fraud litigation. Because of the competitive process that the lead plaintiff undertook in the selection of counsel, resulting in a contingent fee percentage significantly less than the average 31% seen historically, the net recovery to the class after all claims were submitted came to almost 50% of actual losses, or almost 5 times the average net recovery.

Delaware Chancery Court

G&E represented two institutional shareholders in this derivative litigation challenging the conduct of the Board of Directors of Caremark Rx, Inc. in connection with the negotiation and execution of a merger agreement with CVS, Inc., as well as the Board’s decision to reject a competing proposal from a different suitor. Through the litigation, Caremark’s Board was forced to provide substantial additional disclosures to public shareholders and renegotiate the terms of the merger agreement with CVS,  providing an additional $3.19 billion in cash consideration.

District of Delaware

G&E represented a public pension fund as lead plaintiff in this action on behalf of former Chrysler shareholders who exchanged their shares for stock in the new DaimlerChrysler AG, formed in the so-called “merger of equals” between Chrysler and Daimler-Benz. The class claimed that the defendants concealed their true intent to acquire Chrysler as a mere division of Daimler, depriving former Chrysler stockholders of a fair acquisition premium for their shares. Shortly before trial, the defendants agreed to settle the case for $300 million in cash, among the largest securities class action settlements since the enactment of the Private Securities Litigation Reform Act. Shareholders who opted out of the class settlement and later proceeded to trial had their claims rejected by the court.

Eastern District of Michigan

G&E represented an international pension fund as lead plaintiff in a consolidated class action against Delphi Corp. Defendants included Delphi directors and officers in addition to the company’s accounting firm, Deloitte & Touche. The resulting settlement agreements totaled more than $325 million and included $204 million from Delphi Corp., $80 million from Delphi’s directors and officers’ insurance, and $38 million from Deloitte & Touche, highlighting the importance of holding gatekeepers accountable to investors.

Delaware Chancery Court

G&E represented a public pension fund and was appointed co-lead counsel in a class action against El Paso’s Board of Directors, Goldman Sachs, and Kinder Morgan, Inc. alleging that the Board, aided and abetted by Goldman Sachs and Kinder Morgan, breached its fiduciary duties by agreeing to sell El Paso to Kinder Morgan for a less-than-value-maximizing price.  Plaintiffs alleged that the merger was tainted by significant conflicts of interest, including (i) Goldman’s serving as financial advisor to El Paso’s Board despite Goldman’s $4 billion buy-side interest in the deal stemming from its 19% ownership stake in Kinder Morgan, and (ii) the undisclosed interests of El Paso’s sole negotiator for the deal – CEO and Chairman, Douglas Foshee – in acquiring El Paso’s exploration and production assets for himself in a management buyout.  Although the Delaware Chancery Court “reluctantly” declined to enjoin the merger, it found that the plaintiffs had a reasonable likelihood of success in proving that the merger was “tainted by disloyalty” and that they had uncovered some “disturbing” behavior in connection with the negotiations. The case settled for $110 million.

Southern District of New York

G&E represented public pension funds as lead plaintiffs in this federal securities class action alleging that Marsh & McLennan and its officers, directors, auditors, and underwriters participated in a fraudulent scheme involving bid-rigging and secret agreements to steer business to certain insurance companies in exchange for kick-back commissions. After five years of litigation, G&E achieved a $400 million settlement on behalf of the class.

Delaware Chancery Court

In January 2000, G&E filed a shareholder derivative action on behalf of a large public pension fund against the directors of Medco Research, Inc., allegeing breach of fiduciary duty in connection with the directors’ approval of a proposed merger between Medco and King Pharmaceuticals, Inc. G&E was successful in obtaining a preliminary injunction requiring Medco to make supplemental and corrective disclosures. Because of G&E’s efforts, the consideration to Medco’s stockholders increased by $4.08 per share, or over $48 million on a class-wide basis.

District of New Jersey

G&E served as co-lead counsel representing a foreign public pension fund and other funds in a securities class action suit against Merck & Co. after the drugmaker’s stock price plummeted and shareholders lost billions of dollars. The claims stemmed from a 2006 clinical trial called the ENHANCE study, which indicated that Merck’s anti-cholesterol drug Vytorin (a combination of Schering-Plough’s drug Zetia and Merck’s much cheaper and widely available Simvastatin, formerly known as Zocor), had no statistical advantage in treating atherosclerosis when compared to use of Simvastatin alone. The company settled the case just prior to trial, which was scheduled to begin on March 4, 2013.

Southern District of New York

This was a consolidated securities class action in which G&E was appointed co-lead counsel and its client, a public pension fund, co-lead plaintiff. After jury selection had begun for trial, the defendants agreed to settle the case for $300 million, including $75 million from KPMG, constituting one of the largest settlements ever by an accounting firm.

Southern District of New York

G&E was lead counsel in a securities class action against Pfizer alleging that the pharmaceutical company misrepresented the cardiovascular safety of its multi-billion-dollar arthritis drugs, Celebrex and Bextra. In 2004, when the truth about the drugs’ cardiovascular risks was revealed, Pfizer’s stock price declined significantly. The case was extensively litigated for over 10 years, with millions of pages of documents produced and more than 100 depositions taken. As the case was nearing trial in 2014, however, the Court granted defendants’ motion to exclude the testimony of plaintiffs’ expert concerning damages and causation, and thereafter granted summary judgment for defendants because without the testimony, plaintiffs could not prove damages or loss causation. Plaintiffs appealed, and in 2016, the decision was reversed. The parties later agreed on a settlement of the litigation providing for a cash payment by Pfizer of $486 million.

District of South Carolina

G&E represented numerous public and private funds in a federal securities class action and a series of related individual actions against former officers, directors, auditors, and underwriters of Safety-Kleen Corporation, who allegedly made false and misleading statements in connection with the sale and issuance of bonds. This was only the fifth securities class action to go to trial since the passage of the Private Securities Litigation Reform Act. At the conclusion of trial, the court entered judgments in the amount of $192 million against Safety-Kleen Corporation’s former CEO and CFO. Settlements totaling $84 million were reached with the company’s outside directors and auditor, bringing the total in judgments and settlements to $276 million.

Southern District of New York

G&E represented a public pension fund as lead plaintiff in a securities class action against Satyam. Dubbed “The Enron of India,” investors in Satyam were stunned when the company’s Chairman, B. Ramalinga Raju, publicly released a letter admitting that Satyam’s balance sheet was inflated by at least INR 71 billion (Indian rupees), equal to approximately $1.4 billion USD. The day prior to its collapse, Satyam was listed as having a market capitalization of $3.15 billion USD. That value evaporated overnight as a result of the fraud. The litigation was settled for a total of $150.5 million.

Delaware Chancery Court

In one of the largest settlements of derivative shareholder litigation in the history of Delaware Chancery Court, G&E reached a $115 million settlement in a shareholder lawsuit against former executives of American International Group, Inc. (“AIG”) for breach of fiduciary duty. The case challenged hundreds of millions of dollars in commissions paid by AIG to C.V. Starr & Co., a privately held affiliate controlled by former AIG Chairman Maurice “Hank” Greenberg and other AIG directors. The suit alleged that AIG could have done the work for which it paid Starr and that the commissions were simply a mechanism for Greenberg and other Starr directors to line their pockets.

District of New Hampshire

G&E represented two public pension funds as co-lead plaintiffs in a securities class action against Tyco International, Ltd., involving acquisition accounting fraud and looting of the company’s assets by its former officers and directors. After extensive discovery and litigation, the class reached a historic settlement with Tyco for $2.975 billion, the single largest payment from any corporate defendant in the history of securities class action litigation. The class also reached a settlement with Tyco’s former auditor, PricewaterhouseCoopers LLP, for $225 million, the second highest settlement ever reached with an auditor in securities litigation.

Delaware Chancery Court

In a case followed closely by corporate governance experts, G&E won a huge governance settlement with media giant News Corp. regarding the contested extension of the company’s anti-takeover “poison pill” defense, written to defend against a takeover bid by Liberty Media. G&E represented a group of international institutional investors from Australia, the United States, the United Kingdom, and the Netherlands. After News Corp.’s motion to dismiss the case was denied, and just prior to the deposition of News Corp. Chairman and majority owner Rupert Murdoch, the company capitulated to the plaintiffs’ demands and agreed to put the controversial extension of the poison pill defense provision to a full shareholder vote at its next annual meeting. The company further agreed to 20 years’ worth of limitations on the Board of Directors’ ability to adopt poison pills. In addition, the Delaware Chancery Court ruled that shareholders may contractually limit board authority without amending the corporation’s charter.  The ruling has been widely hailed as a milestone in corporate governance reform, particularly in light of the line of decisions analyzing, and, often upholding, unilateral amendment of bylaws by boards of directors.

District of Minnesota

G&E represented three public pension funds as lead plaintiffs in a derivative and class action suit in which G&E successfully challenged $1.2 billion in back-dated options granted to William McGuire, then-CEO of health care provider UnitedHealth Group (“UHG”). This was among the first – and most egregious – examples of options backdating. G&E’s case against UHG produced a settlement of $922 million, the largest settlement in the history of derivative litigation in any jurisdiction.