USG secures affirmance by Delaware Supreme Court of dismissal of merger-related challenges
Clients USG Corporation
Jones Day represented USG Corporation in connection with litigation concerning its merger with Gebr. Knauf KG. The plaintiffs, two then-USG stockholders, initially sued USG, Knauf, and Berkshire Hathaway Inc. in August 2018 seeking to enjoin the stockholders' vote on the proposed transactions. Following a full hearing two days before the schedule stockholder meeting, the court denied the plaintiffs' motion for preliminary injunction, and the vote and merger proceeded as planned. The plaintiffs subsequently filed an amended complaint against the former directors of USG, alleging breaches of fiduciary duty. The defendants moved to dismiss the amended complaint on multiple grounds, and, in August 2020, the court issued its opinion granting the defendants' motion to dismiss. Vice Chancellor Glasscock accepted the defendants' argument that the plaintiffs failed to plead bad faith or disloyalty on the part of the directors, at least one of which would be required to overcome the protections of 8 Del. C.§ 102(b)(7) in light of an exculpatory provision in USG's charter. The Court subsequently denied plaintiffs’ motions for reargument and for leave to amend to advance a claim against the Company’s former CEO. Plaintiffs’ appealed, and following briefing and oral argument, the Delaware Supreme Court affirmed in November 2021.
In re: USG Corporation Stockholder Litigation, No. 2018-0602 (Del. Ch.) Kevin Anderson and Susan Fitzgerald v. Steven Leer, et al., No. 106,2021 (Del.)