(May 24, 2012, Weil News)
On May 23, 2012, Weil secured a significant victory on behalf of Providence Equity Partners L.L.C. (Providence), which had been named as a defendant in a putative shareholder class action arising out of Providence’s $1.64 billion acquisition of Blackboard Inc. (Blackboard), a provider of enterprise software applications and related services to the education industry in the United States and Canada. In a 66-page decision, Judge A. Franklin Burgess, Jr. of the District of Columbia Superior Court dismissed all of plaintiffs’ claims against Providence and Blackboard in their entirety and with prejudice.
On July 1, 2011, Providence and Blackboard jointly announced that they had entered into a definitive merger agreement pursuant to which Providence would acquire all of the outstanding shares of Blackboard common stock for $45 per share in cash. Blackboard shareholders immediately filed lawsuits against Blackboard, Blackboard’s board of directors and Providence (along with Providence’s affiliates through which it planned to effectuate the merger) in the District of Columbia Superior Court (where Blackboard is headquartered) and in the Court of Chancery of the State of Delaware (where Blackboard was incorporated). Despite Providence’s premium offer for Blackboard, the shareholder plaintiffs alleged, among other things, that the Blackboard directors had breached their fiduciary duties of care and loyalty by agreeing to sell the company for an inadequate price and pursuant to an inadequate sale process and by failing to disclose material information to Blackboard shareholders concerning the vote to approve the merger. Plaintiffs also alleged that Providence aided and abetted the Blackboard directors in breaching their fiduciary duties.
In addition to filing complaints challenging the merger, the District of Columbia plaintiffs also filed a motion seeking expedited discovery in anticipation of filing a motion to preliminarily enjoin the shareholder vote on the merger. Providence and Blackboard opposed the motion. On August 17, 2011, after hearing oral argument, the District of Columbia Court entered an order denying plaintiffs’ motion to expedite in its entirety, effectively ending plaintiffs’ efforts to enjoin the merger. On September 16, 2011, Blackboard’s shareholders voted to approve the merger, which subsequently closed on October 4, 2011.
The District of Columbia plaintiffs filed an amended complaint in November 2011, reasserting the same breach of fiduciary duty claims against the Blackboard directors and the same aiding and abetting claims against Providence, and seeking post-closing money damages. Providence and Blackboard moved to dismiss the complaint on the grounds that the shareholder plaintiffs failed to plead, under well-settled principles of Delaware law, any facts that could state a claim against the Blackboard directors for breach of fiduciary duty in connection with the merger or against Providence for aiding and abetting. Oral argument on the motion was held on March 22, 2012. In its May 23, 2012 decision, the District of Columbia court dismissed plaintiffs’ complaint in its entirety and with prejudice.
The Weil team representing Providence included partners John A. Neuwirth, Joshua S. Amsel and Ralph I. Miller, and associates Christine DiGuglielmo, Evert J. Christensen, Jr. and M. Jarrad Wright.