Javelin Prevails in Shareholder Class Action Litigation
Ropes & Gray recently secured victories for client Javelin Pharmaceuticals, Inc. in shareholder class action litigation arising out of two proposed deals.
Javelin first signed a merger agreement with Myriad Pharmaceuticals, Inc. in December 2009, pursuant to which Myriad would acquire Javelin in a stock-for-stock transaction. Complaints were filed in Massachusetts challenging the sufficiency of the price implied in the transaction, the structure of the deal, and the company’s disclosures contained in a joint proxy statement in connection with the deal. Plaintiffs sought expedited discovery with the aim of moving to enjoin that first transaction. On April 1, 2010, following oral argument, Judge Margaret R. Hinkle of the Business Litigation Session, Suffolk County Superior Court denied plaintiffs’ emergency motion for expedited discovery.
Before the transaction with Myriad could close, Javelin received a topping bid from a second company—Hospira, Inc.—offering a superior cash-per-share proposal via tender offer. Javelin accepted the new proposal after terminating its prior agreement with Myriad. The shareholder plaintiffs amended their complaint to challenge the sufficiency of the new, higher price offered and also challenged the sufficiency of the company’s updated disclosures in connection with the new deal. Specifically, the plaintiffs argued that the Javelin board was required to disclose a summary of the valuation analysis performed by its financial advisor in support of a fairness opinion. The plaintiffs moved to enjoin this new transaction, and a hearing on the preliminary injunction motion was held one day prior to the closing. On May 18, 2010, following oral argument, Judge Hinkle denied plaintiffs’ emergency motion for preliminary injunction, accepting defendants’ arguments that the plaintiffs failed to demonstrate likelihood of success on the merits of their disclosure claims and did not establish irreparable harm.
The Ropes & Gray litigation team was led by partners Robert Jones and John Donovan. The deal team was led by partners Marc Rubenstein and Paul Kinsella.