A Brattle team, led by Principals Benjamin Sacks and Bin Zhou, worked on behalf of the plaintiffs in In re: Dell Technologies Inc. Class V Stockholders Litigation, a shareholder class action filed in the Delaware Court of Chancery in 2018. In November 2022, our clients secured a $1 billion cash settlement shortly before trial was to begin, which is the largest cash recovery prior to judgment ever achieved in a fiduciary duty action in Delaware.
The lawsuit pertains to the Class V common stock of Dell Technologies (ticker DVMT) issued in 2016 in conjunction with Dell’s acquisition of EMC Corporation, which also owned about 80% of VMware. In exchange for the EMC stock, EMC shareholders received cash and shares of DVMT, which were designed to track the economic performance of VMware. In 2018, Dell bought the DVMT shares for cash and Dell Class C shares. DVMT shareholders filed a class action lawsuit against Dell’s controlling shareholders – including CEO Michael Dell, private equity firm Silver Lake, and others – for breaches of fiduciary duty relating to the transaction, which they alleged undervalued DVMT.
The plaintiffs retained Mr. Sacks as the damages expert for the shareholder class. Mr. Sacks and the Brattle team assessed the value of the cash and stocks exchanged in the transaction. Major analyses in this case included the contractual features of the Class V stock, Dell’s corporate governance, the value of control and minority discounts, event studies, and Dell’s risk of bankruptcy, including through option pricing models.
The $1 billion cash settlement is subject to approval the Delaware Chancery Court.