North Dakota residents who follow the technology sector will no doubt be aware of the proposed merger between Dell Inc. and EMC Corp. The $60 million dollar deal was first proposed in October 2015, and an EMC filing with the U.S. Securities and Exchange Commission indicates that it will likely be completed by Sept. 30. However, the path from proposal to completion has not been an easy one for the technology powerhouses, and at least one of 15 class action lawsuits filed in connection with the deal will be heard by an appeals court.
The majority of the litigation has been filed by EMC shareholders who claim that executives of the Massachusetts-based multinational put their personal interests ahead of their fiduciary duties when working on the deal. Some of the litigants allege that this behavior was tacitly encouraged by EMC. However, the claims made in the lawsuit do not reflect the wishes of the vast majority of EMC shareholders who voted overwhelmingly to support the merger in July.
While litigation of this kind is often filed by disgruntled stockholders who hold grudges against senior executives over decisions they have made, many of the plaintiffs involved in the EMC lawsuits are major institutional investors. They include the pension funds of city workers in Lakeland and Miami as well as labor groups such as the International Brotherhood of Electrical Workers.
The lawsuits filed in connection with this proposed merger show how even the most careful of planning does not guarantee a successful outcome in the business world. Attorneys with experience in business litigation may remind their clients that pursuing protracted court actions can be ruinously expensive while providing no guarantees of an acceptable outcome, and they may recommend that an amicable settlement be sought whenever possible.