October 31, 2014
On October 21, 2014, Weil secured a significant victory on behalf of Centerbridge Partners, L.P. (Centerbridge), which had been named as a defendant in a putative shareholder class action arising out of its $1.1 billion acquisition of P.F. Chang’s China Bistro, Inc. (P.F. Chang’s). Maricopa County Superior Court Judge J. Richard Gama dismissed all of plaintiffs’ claims against Centerbridge, P.F. Chang’s, and P.F. Chang’s former board of directors in their entirety and with prejudice.
On May 1, 2012, P.F. Chang’s announced that the company had entered into a merger agreement pursuant to which a wholly-owned subsidiary of Centerbridge would commence a tender offer to acquire all of the outstanding shares of P.F. Chang’s common stock at a purchase price of $51.50 per share cash. P.F. Chang’s shareholders immediately filed lawsuits against the company, its board of directors, and Centerbridge in the Superior Court for Maricopa County, Arizona (where P.F. Chang’s was headquartered), and in the Court of Chancery of the State of Delaware (where P.F. Chang’s was incorporated). Despite Centerbridge’s premium offer for P.F. Chang’s, the shareholder plaintiffs alleged, among other things, that the P.F. Chang’s 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 P.F. Chang’s shareholders concerning the tender offer. Plaintiffs also alleged that Centerbridge aided and abetted the P.F. Chang’s directors in breaching their fiduciary duties.
In addition to filing complaints challenging the acquisition, the Arizona plaintiffs also filed a motion seeking expedited discovery in anticipation of filing a motion to preliminarily enjoin the closing of the acquisition. P.F. Chang’s and Centerbridge opposed the motion. On June 20, 2012, after hearing oral argument, the Maricopa County Superior Court entered an order denying plaintiffs’ motion to expedite in its entirety, effectively ending plaintiffs’ efforts to enjoin the acquisition. By the time Centerbridge’s tender offer expired and the acquisition closed pursuant to a short-form merger on July 2, 2012, an overwhelming majority of P.F. Chang’s shareholders had tendered their shares.
The Arizona plaintiffs filed an amended complaint in October 2013 that reasserted the same breach of fiduciary duty claims against the former P.F. Chang’s directors and the same aiding and abetting claims against Centerbridge and sought post-closing money damages. P.F. Chang’s, its former directors, and Centerbridge moved to dismiss the complaint. Oral argument on the motion was held on October 1, 2014. In its October 21, 2014 decision, the Arizona court dismissed plaintiffs’ complaint in its entirety and with prejudice.