No Recovery, You Owe Us Nothing
Leveraged takeovers (or “buyouts”) of publicly-traded companies are high-stakes transactions that can result in significant profits for institutional buyers while leaving existing shareholders struggling to understand why they have received less than fair value for their investments. Corporate executives, managers and directors have fiduciary responsibilities that require them to act in the best interests of the company and its current owners; but, when a leveraged buyout is on the table, making the right decision is not always as easy as it sounds.
At Searcy Denney, our commercial litigation attorneys provide experienced legal representation for leveraged buyout disputes throughout Florida. We are available to represent clients in both pre-closing disputes and post-transaction litigation. In business for over 40 years, our firm is a trusted advocate for shareholders seeking to protect their rights as well as corporate entities forced to justify their decisions in leveraged takeover transactions.
In leveraged takeovers, existing shareholders are entitled to demand fair value for their shares. While minority shareholders can be forced to sell under certain circumstances, they generally cannot be forced to sell for less than fair value. The concept is simple: In a corporation, the shareholders’ interests come first, and a leveraged buyout that fails to maximize shareholder value can often be fertile grounds for litigation.
Of course, a leveraged buyout is anything but simple, and corporate fiduciaries must be careful to avoid exposing themselves to liability in leveraged takeover transactions. Shareholders seeking to protect their financial interests will often take legal action in order to:
These and other types of shareholder claims can be used to challenge the actions of corporate boards, executives and senior management, and they can often be asserted by individual shareholders, in a shareholder derivative lawsuit or on a class-wide basis.
For deals that have yet to close, shareholders may be able to protect their interests proactively by filing for injunctive relief. This can force renegotiation of unfavorable terms, and help ensure that shareholders will realize appropriate returns when the takeover occurs. If it is too late to enjoin a leveraged takeover, shareholders can seek fair compensation through post-transaction litigation. In recent years, there have been numerous instances of shareholders securing additional payment following “going-private” transactions and other leveraged takeovers.
If you would like more information about shareholders’ rights in leveraged takeover transactions, contact Searcy Denney’s offices in Tallahassee or West Palm Beach for a complimentary initial consultation. To discuss your shareholder claim or defense strategy in confidence, call (800) 780-8607 or inquire online today.