January 27, 2017

Delaware Chancery Court Approves $17.9 Million Settlement for Minority Stockholders of Cornerstone Therapeutics

Wolf Popper was appointed as a lead counsel to represent the class of Cornerstone Therapeutics Inc. stockholders in a case arising from Cornerstone’s acquisition by its majority shareholder: Chiesi Farmaceutici SpA., which had already owned a 65 percent stake, In re: Cornerstone Therapeutics Inc. Stockholder Litigation, Case 8922, (Del. Ch.).  In the suit, Cornerstone and individual directors were accused of selling the company at an unfair price in breach of their fiduciary duties.

The litigation that followed included a midcase appeal to Delaware’s Supreme Court, producing an important high court ruling that, to avoid dismissal, claims against independent directors have to plead facts suggesting nonexculpated breaches of fiduciary duty, such as actions in bad faith or adverse self-interest.

The parties entered into a stipulation of settlement and the hearing on the settlement occurred on January 26, 2017.  At the settlement hearing, Vice Chancellor Glasscock approved a settlement that established a gross settlement fund of $17.9 million for the benefit of Cornerstone’s minority stockholders.  Specifically, the Court stated that class attorneys achieved “almost nothing short of the best result.”

The Court pointed out that “[t]here was a great deal of litigation done.  Interesting and undetermined areas of law had to be explored by counsel for both sides.”  Vice Chancellor Glasscock later said at the hearing that it was “vanishingly unlikely” that shareholders left any claims behind in the deal.