By Lewis Tesser and Timothy Nolen
A recent opinion from the District Court for the Southern District of New York demonstrates the difficulty of obtaining an injunction to block a merger between foreign corporations. The litigation involved issues of corporate law, business law, securities law, civil practice and international law.
The case, Litwin v. Oceanfreight, Inc., 2011 U.S. Dist. LEXIS 127362 (S.D.N.Y. November 2, 2011), concerned an American shareholder of a Greek shipping corporation whose shares traded on the NASDAQ. The shareholder sought to obtain a preliminary injunction blocking a merger between the corporation and another Greek shipping company on the grounds that the company did not comply with timing requirements in releasing proxy statements, the company made misrepresentations in its proxy statements, and the company’s directors breached a fiduciary duty to the company by not maximizing the value of the shares. The Court, however, rejected the argument that the plaintiffs were likely to prove their allegations, noting that the Greek corporation was not bound by the SEC’s proxy rules and the board had not failed to maximize the shares’ value.
At Tesser, Ryan & Rochman, LLP, our attorneys have handled various complex corporate and business litigation cases involving both large and small corporations. We can advise clients of their legal options and the propriety of pursuing legal action.