Law360 / DPK in the News
New Disclosures Won’t Cut It In $2.7B Merger Suit, Court Says
A New York appellate court on Thursday rejected a bid to approve a class action settlement in a suit over Martin Marietta Materials’ $2.7 billion purchase of Texas Industries, finding additional disclosures wouldn’t benefit shareholders.
The appellate panel refused to grant final approval of the settlement, finding that investment partnership City Trading Fund has not shown that additional disclosures regarding Martin Marietta Materials Inc’s. purchase of Texas Industries Inc. would provide any benefit to shareholders... The appellate panel ruled in a brief order that CTF provided no evidence indicating that additional disclosures regarding MMM adviser's ownership of TXI shares impacted the assessment of the deal.
The panel said there was also no evidence of any manipulative conduct or that the adviser stood to gain any benefit aside from increased share value. In addition to any perceived benefit that CTF alleged the adviser might have gained, the court’s opinion noted that these disclosures were actually included in 13-F forms that were filed by the bank.
In February 2018, Judge Shirley Werner Kornreich, who had previously denied preliminary approval only to see a New York appellate court reverse her ruling and say her scathing of the deal was premature, blasted the deal again as a “peppercorn and a fee...”
Counsel for Martin Marietta Materials shareholders who objected to the settlement, David Pegno of Dewey Pegno & Kramarsky LLP, told Law360 Friday that the firm is “very pleased by the First Department’s decision, which correctly affirmed Justice Kornreich’s thorough decision.”
New Disclosures Won’t Cut It In $2.7B Merger Suit, Court Says Law360, April 12, 2019 By Darcy Reddan