DealLawyers.com Blog

Here’s news from Steven Haas of Hunton & Williams:

The Court of Chancery recently granted an attorneys’ fee award of $8.25 million resulting from the settlement in In re Gardner Denver, Inc. S’holder Litigation, C.A. No. 8505-VCN, transcript (Del. Ch. Sept. 3, 2014). The post-closing settlement provided for a monetary payment of $29 million to the stockholder class in connection with litigation challenging Gardner Denver’s $3.9 million go-private transaction, which closed on July 20, 2013. Prior to the stockholders’ meeting, Gardner Denver also supplemented its proxy statement to provide additional details regarding, among other things, (i) how its former chief executive officer was consulting with the winning bidder and (ii) the status of various potential bidders’ due diligence review when those bidders withdrew from the sale process. In addition, the company granted waivers of standstill agreements with potential bidders.

The settlement was reached after the parties agreed to mediation. $1 million of the attorneys’ fee award was allocated to the “therapeutic” benefits, and the remaining $7.25 million was awarded for the monetary payment. The settlement is noteworthy since most merger litigation settlements only provide for additional disclosure. According to Cornerstone Research, only 2% of merger settlements in 2013 involved a monetary payment. In granting the attorneys’ fee awards in Gardner Denver, Vice Chancellor Noble observed that that “[r]ecoveries of this size don’t just happen.”