In a memorandum opinion dated February 26, 2020, Chancellor Andre Bouchard of the Delaware Court of Chancery largely denied the defendants’ motions to dismiss a stockholder action asserting breach of fiduciary duty claims in connection with the 2018 controller buyout of AmTrust Financial Services, Inc., a large insurance company. Co-Lead Plaintiffs, including Wolf Popper’s client Arca Capital Group, allege, among other things, that the buyout was designed to enrich AmTrust’s controlling stockholder family at the expense of minority stockholders, who ultimately received inadequate cash consideration for their shares, and that AmTrust’s special committee, purportedly formed to negotiated on behalf of minority stockholders, was conflicted and ineffective. Chancellor Bouchard ruled that the plaintiffs’ complaint sufficiently established that a majority of the committee members “had a material self-interest in the transaction,” and also observed that the complaint “raise[s] significant questions” about the overall fairness of the merger process.
The case is In re AmTrust Financial Services, Inc. Stockholder Litigation, Case Number 2018-0396-AGB, in the Delaware Court of Chancery, and Wolf Popper is Co-Lead Counsel