S&C Clears Solera Board in Allegations Stemming From Vista Acquisition

January 5, 2017

S&C successfully represented former members of Solera Holdings Inc.'s board of directors in obtaining the dismissal with prejudice of a complaint filed by a putative class of former Solera stockholders. The plaintiff asserted that the board members, who approved Vista Equity Partners's $6.5 billion acquisition of Solera, breached their fiduciary duties by improperly favoring the interests of Solera's management and failing to obtain a higher sale price, among other allegations. S&C previously represented a special committee of the Solera board in the Vista transaction, which was completed on March 3, 2016. In its motion to dismiss, the board argued, among other things, that the matters about which the plaintiff complained had in fact been disclosed to the stockholders and that the plaintiff's challenges to the merger following that fully informed stockholder vote were foreclosed as a matter of law.

In his opinion, Chancellor Andre G. Bouchard of the Delaware Court of Chancery reaffirmed the longstanding principle that, where a company seeking stockholder approval of a transaction has disclosed all facts that would have been material to a voting stockholder, the business judgment rule applies. Chancellor Bouchard held that Solera disclosed all material facts relating to the Vista deal to its stockholders, thereby invoking the business judgement rule and no exception to the rule applied in this case. The court thus dismissed the action in its entirety.

The S&C litigation team was led by partner Brian Frawley. An S&C team of general practice, tax and antitrust lawyers represented a special committee of the Solera board in the Vista transaction.