Delaware Supreme Court Rejects Challenge to C&J Energy/Nabors Merger
C&J Energy Services, Inc. and certain of its
former directors and officers recently won a major victory at the Delaware
Supreme Court, overcoming a shareholder challenge to the company’s $2.9 billion
transaction with Nabors Industries Ltd.
This was the lawsuit’s second trip
to the Delaware Supreme Court. The first appeal resulted in a landmark
opinion that reversed an injunction issued by the Delaware Chancery Court,
which had required C&J to solicit alternative bids for the company from
other potential buyers for a period of 30 days before conducting its
This time, the Delaware high court
affirmed the Delaware Chancery Court’s dismissal, holding that the approval by
C&J’s stockholders of the transaction foreclosed the plaintiff’s claims. Plaintiff had asserted that the stockholder vote was
ineffective because C&J’s proxy statement did not disclose all material
information, including the terms of a non-binding bid that was submitted during
the court-ordered go-shop process.
to the Court’s March 23, 2017 opinion, "Ultimately, the allegations of the
complaint are what are relevant to our analysis, and the complaint does not
contain pled facts supporting inferences that the proxy statement was
In addition to upholding the
dismissal, the Supreme Court affirmed the Chancery Court’s award of $542,000 in
damages to cover costs associated with the court-ordered solicitation
C&J is represented by V&E partners
Michael Holmes and Craig Zieminski, senior associate Olivia Howe and associates Meriwether Evans and Meredith Jeanes.