December 11, 2018
On December 7, 2018, Weil obtained a major victory in an appeal before the Tenth Circuit in a 11-year-long litigation arising out of the $22 billion acquisition of the Archstone REIT, one of the largest go-private transactions in the history of the REIT industry. In a published opinion, a three-judge panel of the Tenth Circuit unanimously affirmed a decision by the lower court granting summary judgment on every remaining count against more than 20 defendants, including Lehman Brothers, Tishman-Speyer, Equity Residential, the Archstone-Smith REIT, and indemnifying parties Bank of America and Barclays.
The plaintiffs represented a class of real estate investors that owned special tax-preferred interests in Archstone. They alleged that the acquisition stripped them of their tax benefits, underpaid them relative to other equity holders, and violated the governing charter of Archstone, in breach of its fiduciary duties, and to the improper benefit of the buyers. Weil ran all aspects of the litigation over the past decade, which included, among other things, previous visits to the Seventh and Tenth Circuits, overlapping proceedings before more than a half-dozen judges in Colorado federal court, Illinois state court, California state court, New York state court, and three arbitrations resulting in favorable decisions that were confirmed by three different courts.
As detailed in a previous announcement, in August 2017, Weil secured summary judgment on every remaining count against every remaining defendant on the eve of trial based on a massive record that included 80 depositions, 1 million pages of documents, and testimony from accountants, lawyers, bankers and academics.
On appeal, the plaintiffs argued that the contract at issue was ambiguous and issues of fact precluded the grant of summary judgment. In its ruling affirming the lower court decision, the Tenth Circuit panel held that the way that the plaintiffs’ interests were treated in the merger complied with Archstone’s charter as a matter of law based on the undisputed facts and, accordingly, it did not breach any fiduciary duty to the plaintiffs. The Tenth Circuit also refused to entertain a number of arguments presented by plaintiffs for taking contrary positions, both below and on appeal, as the Weil team highlighted in its papers.
The Weil team consisted of Litigation Department Co-Chair Jonathan Polkes, Securities Litigation partner Caroline Zalka, and Appellate Litigation partner Adam Banks, and included associates Melanie Conroy, Justin D’Aloia, Ondrej Staviscak-Diaz, Raquel Kellert, Lauren Engelmyer and Andrew Cauchi.