Title: In re AmTrust Financial Services, Inc. Stockholder Litigation, No. 2018-0396-AGB
Court: Delaware Court of Chancery
Wolf Popper LLP is co-lead counsel in a consolidated action on behalf of the former minority stockholders of AmTrust Financial Services, Inc., an insurance company, who had their shares extinguished pursuant to a 2018 controller buyout. In an Opinion dated February 26, 2020, the Court denied, in large part, the defendants’ motions to dismiss. The complaint alleges that AmTrust’s directors and controlling stockholder family labored under conflicts of interest and breached their fiduciary duties in negotiating and consummating an unfair merger, in which minority stockholders received inadequate consideration for their shares.
For further information about this case, please contact the following attorneys:
Carl L. Stine
Adam J. Blander
Wolf Popper Group Defeats Motion to Dismiss in AmTrust Stockholder Lawsuit
In a memorandum opinion dated February 26, 2020, Chancellor Andre Bouchard of the Delaware Court of Chancery largely denied the defendants’ motions to dismiss a stockholder action asserting breach of fiduciary duty claims in connection with the 2018 controller buyout of AmTrust Financial Services, Inc., a large insurance company. Co-Lead Plaintiffs, including Wolf Popper’s client Arca Capital Group, allege, among other things, that the buyout was designed to enrich AmTrust’s controlling stockholder family at the expense of minority stockholders, who ultimately received inadequate cash consideration for their shares, and that AmTrust’s special committee, purportedly formed to negotiated on behalf of minority stockholders, was conflicted and ineffective. Chancellor Bouchard ruled that the plaintiffs’ complaint sufficiently established that a majority of the committee members “had a material self-interest in the transaction,” and also observed that the complaint “raise[s] significant questions” about the overall fairness of the merger process.
The case is In re AmTrust Financial Services, Inc. Stockholder Litigation, Case Number 2018-0396-AGB, in the Delaware Court of Chancery, and Wolf Popper is Co-Lead Counsel.
Wolf Popper LLP Appointed Co-Lead Counsel and Arca Capital Appointed Co-Lead Plaintiff in Class Action Challenging Majority Shareholder Buyout of AmTrust Financial Services, Inc.
By Order dated April 18, 2019, the Delaware Chancery Court in In re AmTrust Financial Services, Inc. Stockholder Litigation, Consol. C.A. No. 2018-0396-AGB, appointed Wolf Popper as Co-Lead Counsel and Arca Capital as Co-Lead Plaintiff in that breach of fiduciary class action, which is pending in that Court. A copy of the Court’s order is here. Subsequently, an Amended Verified Consolidated Class Action Complaint was filed in the lawsuit. A copy of the public version of that complaint is here.
Wolf Popper LLP Commences Litigation on Behalf of Arca Capital Against AmTrust Financial Services, Inc.
On May 30, 2018, Wolf Popper filed a lawsuit against AmTrust Financial Services, Inc. (“AmTrust”) in the Delaware Court of Chancery, on behalf of Arca Capital Group (“Arca”), a private equity group with offices in the Czech Republic and the Slovak Republic that owns over 4.8 million AmTrust shares. The lawsuit seeks to obtain certain of AmTrust’s corporate books and records.
On March 1, 2018, AmTrust, an insurance holding company, announced that it had entered into a merger agreement whereby its controlling stockholder family will acquire the company’s unaffiliated stock for $13.50 per share. Following widespread and intense criticism of the deal (including from Institutional Shareholder Services, Inc.), as well as a proxy battle initiated by activist investor and AmTrust stockholder Carl Icahn, the controlling family increased its offer to $14.75 per share. Arca believes that the merger price offered to minority stockholders is inadequate, and that the controlling family is attempting to purchase AmTrust at a steep discount. In this lawsuit, Arca seeks, among other things, internal financial documents concerning the fair value of AmTrust stock, as well as material shedding light on certain conflicts of interest maintained by the AmTrust directors who were tasked with negotiating the merger for the benefit of minority stockholders. The merger is expected to close in the second half of 2018.
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For additional information, please contact Carl L. Stine at firstname.lastname@example.org or at (212) 749-4600.