When Texas companies get involved in business disputes, a planned merger can easily be derailed. Fujifilm recently launched a lawsuit against Xerox for $1 billion. The lawsuit also requested punitive damages be awarded. The photocopier company reportedly owes $183 million in fees according to Fujifilm for terminating the merger. The suit claimed “intentional and egregious conduct” as the primary reason for ending the merger deal.
Investors Carl Icahn and Darwin Deason were initially proponents of the $6.1 billion merger but chose to walk away from the deal. The photocopier company ended up reaching a settlement with the two. As a part of the settlement, control of the company was handed over to new management. The U.S. District Court in Manhattan settled the case.
The initial agreement between the two entities called for a joint venture. The completed transaction would have resulted in a newly merged joint venture entitled Fuji Xerox. Fujifilm would have owned 50.1 percent of the common stock available to Xerox.
Icahn, one of key investors in the deal, along with Deason, opined that the new merger undervalued the Xerox company. Deason accused former chief executive of orchestrating the merger to keep his job. Chief executive Jeff Jacobson stepped down as a part of the settlement agreement, and the markets responded to the settlement. Xerox shares were lowered 0.8 percent. On the New York Stock Exchange, the shares traded at $27.18.
Business litigation and partner disputes are common in the business arena. Anything like a breach of contract or breach of fiduciary duty can escalate a matter. When a company is involved in a similar scenario, a business and commercial lawyer may be consulted. Company owners may wish to seek guidance earlier on from an experienced attorney to avoid similar challenges.