NEW YORK - A team of Loeb & Loeb LLP attorneys successful opposed a request for preliminary injunction on behalf of Beijing-based Fushi Copperweld, Inc. (Nasdaq: FSIN), in a shareholder class action litigation challenging Fushi’s announced going-private transaction. On December 6, 2012, the Nevada District Court for Clark County, Department XII, ruled in favor of Fushi on every ground, denying Plaintiff’s claims that the company and its board of directors breached fiduciary duty by approving a proposed merger agreement with a buyer group including Fushi’s Chairman and Co-Chief Executive Officer and affiliated entities. The court’s decision enabled Fushi’s shareholders’ to vote on and approve the merger on December 11.
Plaintiff, acting on behalf of a putative class of shareholders unaffiliated with the buyer group, argued that Nevada’s business judgment rule should not apply because the buyer group is headed by the Company’s CEO and Chairman. Rather, Plaintiff argued that Delaware’s “entire fairness” inquiry applied and that the burden was on the Defendants to demonstrate that the offer price is fair, as was the evaluative process undertaken by the board’s Special Committee. The judge disagreed, holding that the protections of Nevada’s business judgment rule applied. He also held that the Plaintiff had not shown that he was likely to succeed on the merits, that absent the requested relief he would suffer irreparable injury or that the balance of the hardships weighed in his favor.
Loeb & Loeb's China Litigation, Enforcement and Arbitration Response (CLEAR) Team represents U.S.-listed Chinese companies and affiliates, their officers and directors, and financial institutions and intermediaries involved in complex securities litigation, arbitrations and regulatory proceedings.