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On December 26, plaintiff Steven J. Reynolds on behalf of Xerox Holdings Corporation filed a complaint against Defendants Carl Icahn et al (Steven J. Reynolds on behalf of Xerox Holdings Corporation v. Carl Icahn et al 657692/2019) for a derivative complaint against Icahn in relation to Xerox and HP’s planned transaction. The complaint was filed in the Supreme Court of the State of New York, in New York County. Plaintiff is represented by Monteverde & Associates and Paskowitz Law Firm.
The suit is a “shareholder derivative action, brought on behalf of Xerox Holdings Corporation, with respect to breaches of the fiduciary duty of loyalty and usurpation of a corporate opportunity by defendants” namely, Carl Icahn and the entities that he controls. Carl Icahn is a dominant fiduciary of Xerox. The complaint stated that Icahn entities “purchased approximately $1.2 billion of HP Inc. common stock knowing that Xerox was planning to acquire, or considering acquiring, all HP common stock at a premium price, generating a substantial profit for the benefit of Icahn Capital and High River.” The suit alleged that this stock was purchased as a result of the planned transaction between Xerox and HP. The suit seeks to recover this unjust financial gain to benefit Xerox.
The complaint stated that Icahn dominates and controls Xerox. In July or August, Xerox and HP were in discussion about a proposed transaction. News of the proposed transaction became public in November. It is suspected that Icahn and his entities purchased or traded a large quantity of HP stock with knowledge of the proposed transaction. Further, in December “Xerox’s claim about the obvious merits of its acquisition of HP echoed a statement by Icahn on December 4, 2019, that ‘the combination HP and Xerox is one of the most obvious no-brainers I have ever encountered in my career – one where activism should not even be necessary at all because the merits of the combination are so obvious to everybody involved.’” Icahn and his entities HP stock have risen $128 million in value from approximately $1.16 billion to $1.285 billion. Additionally, six of the seven board members are affiliated with Icahn or also participated in wrongdoing.
The complaint alleged that these actions have harmed Xerox and its shareholders. Plaintiff has sought relief from breach of fiduciary duty of loyalty, breach of contract and unjust enrichment against the Icahn Defendants, as well as breach of fiduciary duty against the director defendants. Reynolds on behalf of Xerox has sought judgment against defendants, an imposed constructive trust with respect to Icahn, give earned profits from HP stock to Xerox, payment for damages and other payment and relief.
AuthorJanuary 8, 2023 at 4:20 PM
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