In re Compellent Technologies, Inc. Shareholder Litigation

Settled: September 16, 2011

In this shareholder litigation, we secured key deal improvements, including rescission of a poison pill, which added significant value for Compellent shareholders.

On January 13, 2011, Labaton Sucharow was appointed co-lead counsel for the class, including class representative, Genesee County Employees' Retirement System in In re Compellent Technologies, Inc. Shareholder Litigation, C.A. No. 6084-VCL (Del. Ch.).

The case arises out of the proposed acquisition of Compellent Technologies, Inc. ("Compellent") by Dell, Inc. ("Dell"). Under the terms of the merger agreement, Compellent shareholders were to receive $27.75 per share owned (the "Proposed Transaction"). The complaint alleged that the merger price undervalued Compellent as it was at a discount to the trading price prior to the date of the announcement of the Proposed Transaction. The complaint also alleged that the board of directors of Compellent breached its fiduciary duty to obtain the best value for Compellent shareholders, by, among other things, adopting a "poison pill" provision that made it virtually impossible for a bidder other than Dell to acquire the Company for a higher price.

On May 6, 2011, the parties filed a Stipulation of Settlement with the Court, memorializing the terms of a settlement. Under the terms of the settlement, the defendants made additional disclosures to shareholders and extended the time for a shareholder vote. The settlement also provides for amendment of the merger agreement to (1) eliminate the poison pill, (2) reduce the amount of the termination fee and (3) eliminate the requirement that Compellent be required to enter into a standstill agreement with future bidders. On September 16, 2011, the Court granted final approval of the settlement.