S&C Client Diebold Nixdorf Obtains Dismissal of Post-Merger Securities LitigationApril 8, 2021
Diebold Nixdorf and three of its former CEOs won a motion to dismiss a purported securities fraud class action filed in the wake of Diebold's 2015 merger with its German competitor, Wincor Nixdorf. Plaintiffs alleged that the challenges of integrating the two companies led to losses, the departure of the three executives, and a sharp decline in the stock price of Diebold Nixdorf, the world's largest ATM manufacturer and payment systems company.
The plaintiffs further alleged that Diebold Nixdorf had made fraudulent statements about the companies' integration efforts. The defendants countered that these were non-actionable general statements of optimism. In a March 30 ruling, Judge Loretta Preska of the Southern District of New York dismissed all claims, agreeing that the plaintiffs could not “leverage Defendants' general expressions of corporate optimism about that merger…to bootstrap a Section 10(b) or Rule 10b-5 claim.” The judge also wrote that “a company may shift gears for any number of reasons, most of which have nothing to do with fraud. … Hindsight, although 20/20, cannot be used to prove securities fraud.”
The S&C team representing the defendants includes Jeffrey Scott, David Rein and Virginia Hildreth.