A proposed merger between Texas-based computer manufacturer Dell Inc. and Massachusetts-based technology company EMC Corp. would be the biggest technology merger in history if it goes through. However, the legality of the merger has been disputed in several class action lawsuits. In a regulatory filing on Aug. 8, EMC stated that groups that claim to be made up of EMC shareholders began much of the business litigation by filing 13 lawsuits. Two other lawsuits were filed by VMware Inc. shareholders.
On July 19, EMC shareholders voted to approve the $60 billion merger with Dell. A U.S. Securities and Exchange Commission filing by EMC states that the two technology companies are expected to complete their merger before the end of the third quarter on Sept. 30. The merger, which is a buyout of EMC by Dell, was first proposed in October 2015. Though Dell is the world's third largest computer manufacturer, the company has lost money for the past three years.
The vast majority of the lawsuits allege that EMC directors violated their fiduciary duties by agreeing to the proposed merger. EMC directors are also accused of aiding and abetting breaches of fiduciary duty. Some of the plaintiffs in the class action lawsuits represent labor organizations including IBEW Local No. 129 in Ohio, the City of Lakeland Employees Pension and Retirement Fund and the City of Miami Police Relief.
Merging two large companies is a complicated undertaking, and there are often some shareholders that do not agree to the transaction. An attorney may be able to help a company that is involved in a merger to handle any resulting business litigation so that both companies can achieve their goals.
Source: Austin Business Journal, "Class action lawsuit over Dell-EMC merger still lingers," Christopher Calnan, Aug 10, 2016