Securities

On September 27, 2017, Exa Corporation entered into an agreement specifying that Exa will be acquired by Dassault Systemes Simulia Corporation, with stockholders of Exa receiving $24.25 per share. On October 12, 2017, Exa filed a Solicitation/Recommendation Statement with the Securities and Exchange Commission (SEC) about the transaction. According to the complaint, both this document and the merger agreement are problematic for shareholders. The complaint claims that the agreement too restrictive to result in the best deal for shareholders and that the Statement omits too much information to allow shareholders to judge the calculations and opinions it contains.

Spark Networks owns dating properties JDate and ChristianMingle, which uses websites and mobile apps to help singles meet others of the Jewish and Christian faiths. The complaint for this class action quotes the company’s CFO on its results for the fourth quarter of 2016: “Spark ended the fourth quarter with $11.4 million of cash and cash equivalent, an increase from … $6.6 million at the end of 2015. At year end the Company had no outstanding debt.” A financial and investing website called Spark a “hot dating stock” as well. So why, some shareholders of Spark are asking, does the merger proposed with Affinitas GmbH seem to offer such inadequate compensation? According to the complaint, the merger agreement contains problematic no-solicitation provisions and the Proxy Statement violates the Securities Exchange Act of 1934.

The transaction at issue in this class action is the proposed sale of Terraform, a wholly-owned indirect subsidiary of SunEdison, to a party that the complaint calls “SunEdison’s preferred bidder,” Orion US Holdings. SunEdison has filed for Chapter 11 bankruptcy protection. The complaint alleges that the Proxy Statement filed in connection with the deal does not contain sufficient information to allow shareholders to properly evaluate the deal, including the bases for financial information, conflicts of interest, and dealings with other potentially interested parties.

According to the complaint for this class action, Navient’s statements on its recent 10-K and 10-Q filings misled investors into thinking that it exercised care in making loans and advising students on repayment plans. Thus, the complaint says, when an October 2017 lawsuit alleged that Navient (1) engaged in deceptive practices to make subprime loans, and (2) it steered student borrowers into forbearance plans that postponed payments and allowed interest to accumulate rather than pointing them to income-driven repayment plans, Navient’s stock abruptly lost 14% of its value, damaging shareholders.

The complaint for this case alleges that the Proxy Statement filed with the Securities and Exchange Commission (SEC) for the proposed sale of Arc Logistics Partners (ALP) to a number of other entities omits material information that shareholders need in order assess their interests and vote on the transaction. This lawsuit is not a class action but functions similarly to one since it’s brought by a shareholder of ALP. The complaint claims that the Proxy violates Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and the SEC’s Rule 14a-9 in omitting the bases for certain calculations, projections, valuations, and opinions in the Proxy as well as the details of confidentiality agreements governing talks with other companies.

Numerex Corporation works with the “Internet of Things,” that is, the interconnected network of devices that communicate with each other via the Internet. On August 3, 2017, the company announced that it had formed a merger agreement to sell Numerex to Sierra Wireless, Inc. But according to the complaint for this class action, the Form F-4 Registration Statement filed with the Securities and Exchange Commission (SEC) omits or misrepresents material information, which the complaint alleges is a violation of the Securities Exchange Act of 1934.

The Bank of Napa offers businesses and consumers a range of products and services in California’s Napa County, with a focus on small and medium-sized businesses, professionals, and not-for-profit groups. On July 31, 2017, a proposed transaction was announced in which the Bank of Marin Bancorp and Bank of Marin would acquire the Bank of Napa. The complaint for this class action alleges that the Form S-4 Registration Statement for the transaction omits a great deal of information that renders the statement misleading and prevents shareholders from making an adequate assessment of the transaction, in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and the SEC’s Rule 14-9.

Tesla, the maker of high-performance electric vehicles, has associated its name with high technology and the future. In its May 4, 2016 First Quarter 2016 Shareholder Update letter, it discussed its plans for its Model 3 vehicle, saying, “In the first week of taking deposits for Model 3, we received more than 325,000 reservations despite no advertising or paid endorsements. This implies about $14 billion in future sales, making the Model 3 introduction the biggest consumer product launch ever.” Yet more than a year later, a Wall Street Journal article claimed that in the third quarter of 2017, the company had made only 260 Model 3s—or an average of three per day. Had the company painted a wildly inaccurate picture of its prospects? The complaint for this class action alleges it has done exactly that, in violation of the Securities Exchange Act of 1934.

The board of Orbital ATK, Inc. has entered into a merger agreement to allow Northrop Grumman to buy all outstanding shares of Orbital’s common stock at $134.50 per share. Expected to close in the first half of 2018, the deal, including Orbital’s net debt is valued at about $9.2 billion, but according to the complaint for this class action, a number of things about the deal are troubling. The board filed a Proxy Statement with the Securities and Exchange Commission (SEC) that recommends that shareholders approve the merger but that the complaint alleges is incomplete and misleading.

Dimension Therapeutics focuses on new therapeutic products for people living with rare disease associated with the liver. On October 2, 2017, its board entered into a merger agreement with a company called Ultragenyx. However, the complaint for this class action alleges that the consideration to be paid to stockholders appears inadequate and that the Solicitation Statement filed with the Securities and Exchange Commission (SEC) omits material information that makes it false and misleading.