Wolf Popper LLP Reaches $7.5 Million Settlement in Hansen Medical Stockholder Lawsuit
On February 5, 2019, the parties in In re Hansen Medical, Inc. Stockholder Litigation, together with the parties in a companion case in California, entered into a settlement agreement, that would create a $7,500,000.00 settlement fund for class members. The settlement follows a June 18, 2018 decision from the Delaware Court of Chancery (discussed below) finding that the plaintiffs, represented by Wolf Popper LLP, sufficiently alleged breaches of fiduciary duty in connection with the 2016 “squeeze-out” of Hansen Medical by a group of company insiders.
Wolf Popper LLP Defeats Hansen Medical Defendants’ Motion to Dismiss
In re Hansen Medical, Inc. Stockholder Litigation arises from the acquisition of Hansen Medical, a robotics company, in which certain large stockholders—who together owned over a majority of Hansen’s common stock—received “rollover” equity in the post-merger private company, while Hansen’s unaffiliated public stockholders received only cash in exchange for their shares. Wolf Popper LLP, on behalf of lead plaintiff Windward Venture Partners, LP, commenced suit in Delaware Chancery Court, alleging that the merger unfairly benefited these large stockholders at the expense of the public stockholders.
In an opinion dated June 18, 2018, Vice Chancellor Tamika Montgomery-Reeves denied the motions to dismiss filed by the large stockholders and Hansen’s directors and officers. Specifically, the Vice Chancellor held that Wolf Popper’s complaint had sufficiently demonstrated that the large stockholders had acted in concert as a “control group” to extract special merger benefits only for themselves, and accordingly, could be held liable for breaching their fiduciary duties. For example, the complaint showed that the large stockholders had “a long history” coordinating their investment decisions in Hansen and other healthcare companies, and that during the merger discussions, Hansen’s counterparty sought to negotiate directly with the large stockholders. The Vice Chancellor also held that Hansen’s directors and officers could be found liable for breaching their fiduciary duties for, among other things, disseminating a merger proxy that misled stockholders about Hansen’s financial projections.
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