For the second time in less than two months, an effort to impede the $2.7 billion acquisition of a Henrico County-based insurance giant has quietly faded away.
The Richmond Federal Court dismissed a lawsuit, which Genworth Financial shareholder Daniel Ratliff filed Nov. 14, saying the company’s pending deal to be bought by conglomerate China Oceanwide Holdings was not in stockholders’ best interests.
The dismissal was filed Nov. 22 and the case, which sought class-action status, was closed the next day. No reason for the dismissal was given in court records, other than to say it was voluntarily dropped by the plaintiff.
Ratliff’s attorney, Charles Williams of Richmond law firm Williams & Skilling, did not return a call seeking comment. Genworth has said it doesn’t comment on litigation.
The resolution follows the quick dismissal of a similar suit filed earlier in November by Genworth shareholder Harold Faverman. That case was dismissed three days later, also voluntarily by the plaintiff.
Both cases made similar allegations, claiming breaches of fiduciary duty against the company and its board of directors, and arguing that the deal wouldn’t result in the best value for Genworth shareholders. Both sought to block the deal or win damages should the transaction be completed.
These sorts of cases have become commonplace in the realm of big mergers and acquisitions involving publicly traded companies, often spurred by national law firms that hunt for lead plaintiffs willing to put their name on what could become a class action suit.
The practice has become so common that many companies plan for and include the related legal expenses in their budgets and deal calculations.
Further illustrating the trend, one of the many law firms that typically swoop in on such deals is targeting a pending local bank merger announced last month. New York law firm Monteverde & Associates published a paid release to announce its “investigation of the board of directors of the parent company of Bank of Lancaster, which is in the midst of merging with Petersburg-based Virginia Commonwealth Bank.”
The investigation has not yet produced a lawsuit.