Recently an $8.2 billion deal between the New York Stock Exchange Euronex and IntercontinentalExchange Inc. was reached. Under the terms of the deal, NYSE Euronex would sell itself to ICE for $33.12 a share. The deal should close by late 2013. However, this deal has led to litigation.
On Dec. 24, the New Jersey Carpenters Pension Fund sued NYSE Euronex and its CEO, its chairman and several other NYSE Euronex board members. ICE was also named a defendant in the suit. According to the complaint, the pension fund believes that the sale amounts to a breach of NYSE Euronex’s duty to its shareholders. The pension fund claims that NYSE Euronex has used a flawed system to value itself and that the deal benefits only NYSE Euronex and ICE insiders and is thereby not maximizing profits for its shareholders.
This is the second lawsuit over the NYSE Euronex and ICE deal. An additional lawsuit was filed by an individual shareholder shortly after the deal was announced on Dec. 20. Both lawsuits are asking the court to prohibit the sale between the two companies from being completed.
Business litigation such as this can bring an otherwise successful business to a halt. The courts have the power to reverse sales, issues fines, define contract terms and prohibit behavior. Therefore, it is advantageous for businesses to try to avoid a courtroom, if possible.
In order to avoid full-blown litigation, there are many alternative dispute resolution techniques that can be tried. In some cases, with the right help, deals can be negotiated to avoid the uncertainty of a court case.
Source: Fox Business, “NJ Pension Fund Sues NYSE Over ICE Deal,” Dec. 24, 2012