Seeking Alpha
View as an RSS Feed

Werner Kranenburg  

View Werner Kranenburg's Comments BY TICKER:
Latest  |  Highest rated
  • What To Make Of The Class-Action Lawsuit Against Disney [View article]
    You're welcome. To update further, the settlement in the High-Tech Employee Antitrust Litigation, in the latest amount of $415 million, seems headed for approval by the judge.


    Werner R. Kranenburg, attorney-at-law
    Mar 3, 2015. 11:07 AM | 1 Like Like |Link to Comment
  • Surprise: The Real Costs Of Inversions Are Paid By Ordinary Shareholders [View article]
    COV and MDT have agreed to settle the stockholder litigation concerning their proposed merger.

    Werner R. Kranenburg, attorney-at-law /author/werner-kranenburg

    COV Form 8-K
    Dec 25, 2014. 08:52 AM | Likes Like |Link to Comment
  • Kinder Morgan: Just Cleared Major Hurdle On Way To Merger Vote [View article]
    A copy of the judge's Memorandum Opinion in this case can be viewed here:

    Werner R. Kranenburg, attorney-at-law

    In re Kinder Morgan, Inc. Corporate Reorganization Litigation, CA #10093-VCL, Delaware Chancery Court (Vice Chancellor Laster)
    Nov 7, 2014. 02:17 PM | 1 Like Like |Link to Comment
  • Blue Earth: Strong Sell On Law Enforcement Investigation, Fraud Allegations And Paid Stock Promotion [View article]
    Congratulations Pump Stopper. This article is sourced from extensively in the securities fraud class action complaint filed by a BBLU shareholder in a federal trial court in California last week. The complaint credits the article as the cause of the share price correction.

    In the complaint, paragraph 25 on page 8 reads: "On October 21, 2014, published an article concerning Blue earth that questioned, among other things, the viability of UPStealth." That article is yours, the one above these comments. The next two paragraphs are sourced from the article. Paragraph 28 on page 14 then states: "Following this negative news, the Company's stock fell $1.29 per share, or 50%, on extraordinary volume from its previous closing price to close at $1.29 per share on October 21, 2014." (The whole complaint is 24 pages in length.)

    The shareholder who filed this action, against BBLU, the CEO, CFO and a VP, purportedly seeks to represent purchasers of BBLU common stock who purchased between 7 October 2013 and 21 October 2014, inclusive. The aim of the lawsuit is to recover damages for BBLU shareholders under federal securities laws. Thus far it seems only this one complaint has been filed but more may be forthcoming as other affected holders may still commence their own legal actions and seek to lead the proceedings.

    Whoever interested in reading the actual complaint, please send me a direct message here on SA or via Skype (kranenburgesq) so I can send it to you.

    Werner R. Kranenburg, attorney-at-law /author/werner-kranenburg

    Disclaimer: please note I have no present connection with this litigation but that I may be retained in the matter in future.
    Oct 30, 2014. 10:38 AM | 3 Likes Like |Link to Comment
  • Amedisys on the Hot Seat With Class Action Suit [View article]
    To update on the present status of this case, initially the district court, a federal trial court, granted a motion to dismiss and dismissed the case in a manner it could not be brought again. (Once several cases, arising from the same facts and allegations, purportedly brought as class actions have been filed, one or several plaintiffs will be appointed from that group to lead the one proceeding.)

    The leading shareholders-plaintiffs then urged the court to reconsider the dismissal and grant permission to file an amended complaint, which the court denied.

    The plaintiffs appealed and won: the appellate court "agreed with the district court that the start of government investigations alone do not amount to corrective disclosure when standing alone, but that they must be viewed "together with the totality" of the other alleged partial disclosures." The case has now been sent back to the trial court for further proceedings.

    Werner R. Kranenburg, attorney-at-law

    Public Employees' Retirement System of Mississippi et al. v. Amedisys Inc. et al., 13-30580, U.S. Court of Appeals for the Fifth Circuit
    Oct 10, 2014. 01:21 PM | Likes Like |Link to Comment
  • Royal Imtech: Today's Events Make This Stock A Perfect Short Candidate [View article]
    Thanks Gryn. I'm a New York attorney but could read the Dutch press reporting on the subject since I am Dutch and speak the language. The article I linked to was the latest when I posted it yesterday; the press release you linked to today is today's news.

    To add to that news, also of today, the VEB (a shareholders association) posted its news article on the settlement: (in Dutch).

    In short, in order to participate in this out-of-court settlement and receive compensation, one must have been a shareholder of Imtech at the close of the stock market on 1 February 2013 and one must be a member of the VEB. New members though, those who were not members before today, are only eligible for a fraction of the per-share compensation, half of what existing members can claim. Also, one must continue to be a member for the next four years or so, the expected duration of the payment schedule. (The present annual membership rate is €72.50, approximately $92.)

    These settlement terms are therefore significantly different from those found in court-approved settlements in the US, those which resulted by way of class action litigation conducted in the courts and which do not require membership of any organisation or individual contribution from eligible settlement participants.

    No class action concerning the same facts and allegations has been filed in a federal US court to achieve a separate settlement for (former) IMTEF holders who are not VEB members. Perhaps, not yet.

    Werner R. Kranenburg, attorney-at-law
    Oct 7, 2014. 08:35 PM | Likes Like |Link to Comment
  • Royal Imtech: Today's Events Make This Stock A Perfect Short Candidate [View article]
    It was reported in the Dutch press on Friday that IMTEF is close to settling with shareholders concerning claims relating to the company's accounting fraud (which emerged in February 2013) though it remains unsure whether an agreement will in fact be reached, the level of compensation and how it will be funded. (in Dutch)

    Werner R. Kranenburg, attorney-at-law
    Oct 6, 2014. 09:32 AM | Likes Like |Link to Comment
  • Abercrombie & Fitch reaches settlement in executive pay lawsuit [View news story]
    This settlement agreement had not yet been approved by the judge, but has now been rejected.

    Judge James L. Graham, a federal court judge in Ohio, reportedly said the plaintiff hasn't shown the agreement is fair. Judge Graham "can't find that the negotiated settlement... provides adequate consideration for absent shareholders."

    Werner R. Kranenburg, attorney-at-law
    Sep 29, 2014. 05:25 AM | Likes Like |Link to Comment
  • Surprise: The Real Costs Of Inversions Are Paid By Ordinary Shareholders [View article]
    It is not uncommon for shareholders of to-be-acquired corporations to challenge the transactions and allege their sale process was unfair or other grounds.

    Indeed, the recent transactions concerning the likes of ABBV, COV, FRX and SLXP are subject to such legal action in state and federal courts by their respective shareholders, by private individual holders and institutional investors such as retirement systems alike. (This type of legal action is also referred to as "deal case", "merger litigation" or "M&A litigation".)

    Interestingly, in a deal case concerning for example SLXP, the plaintiff-shareholder specifically argues that because the transaction is not treated as a merger for tax purposes but as a sale, he and other holders like him will have to pay capital gains taxes on their SLXP stock gains; says the complaint: "The individual defendants have failed to put the stockholders' interests first and instead have entered into the merger, despite the unjustifiably high cost and tax consequences for the company's stockholders." [1]

    A similar complaint, based on the causing of a taxable event for some of its shareholders, was filed against ABBV in court yesterday. [2]

    Whether these legal actions will result in favourable outcomes for the plaintiff-shareholders and all affected holders they seek to represent remains to be seen but at a minimum it can be said that investors are making active use of their rights and the issue is under review.

    Werner R. Kranenburg, attorney-at-law /author/werner-kranenburg

    [1] SLXP: Cebrik v. Salix Pharmaceuticals Ltd et al., No. 10068, Delaware Chancery Court
    [2] ABBV: Plumbers & Steamfitters Local 60 Pension Plan v. Alpern, No. 10134, Delaware Chancery Court;
    Sep 17, 2014. 03:04 PM | Likes Like |Link to Comment
  • Cornerstone Therapeutics Is Selling Itself Too Short [View article]
    > MagicDiligence absolutely agrees with upset shareholders and the law firms
    > crying foul on shareholders' behalf. But the key question is: is it likely anything > will be done about it?

    MagicDiligence, there is no definitive answer to that question yet though there is an answer for now.

    Last week, in thier case involving this $255 million acquisition by Chiesi Farmaceutici SpA of "the minority interest in a corporation by a controlling stockholder, in a manner alleged not to be entirely fair", the minority stockholders achieved a significant win in court on behalf of affected stockholders. "Because the controller is a fiduciary that stood on both sides of this transaction, the controller will have to demonstrate on a developed record that the transaction was entirely fair to the minority [...]."

    The defendants had sought for the dismissal of most of the case against them but Vice-Chancellor Glasscock, a Delaware Chancery Court judge, decided otherwise and let most of the case proceed.

    Whether there will be a favourable final result for minority stockholders remains uncertain but what is certain is that the "upset shareholders" and their counsel are doing something about something being done about it.

    Werner R. Kranenburg, attorney-at-law

    In re Cornerstone Inc. Stockholder Litigation, Delaware Chancery Court, No. 8922-VCG
    Memorandum Opinion of 10 Sep 2014
    Sep 16, 2014. 05:25 PM | Likes Like |Link to Comment
  • Update: Cynk Technology - Sensing Trouble, The Authorities Act (Sort Of) [View article]
    Indeed following the end of the trading suspension (the maximum ten trading days) the share price collapsed.

    In more recent news, the WSJ reported the following Thursday last week: "Federal prosecutors are investigating the rise and fall of shares in tiny Cynk Technology Corp. in a criminal probe that includes scrutiny of two Belize-based businessmen accused of money laundering and stock manipulation, according to a person close to the probe. The criminal investigation into Cynk is running parallel to a civil probe by the Securities and Exchange Commission [1], said people close to the probes. Investigators are scrutinizing the stock's climb and subsequent collapse this summer, which..."

    Bloomberg reported on the same day that "documents obtained by Bloomberg News show that some of the defendants held millions of Cynk shares for clients in shell companies they helped create."

    Werner R. Kranenburg, attorney-at-law

    [1] Securities and Exchange Commission v. Bandfield et al, USDC Eastern District of New York, 14-cv-05271
    Sep 16, 2014. 02:51 PM | Likes Like |Link to Comment
  • Update: Cynk Technology - Sensing Trouble, The Authorities Act (Sort Of) [View article]
    Paulo, the other content of your article notwithstanding, in it you refer to the Financial Industry Regulatory Authority ("FINRA") as the authority to have suspended trading on CYNK but it was the Securities and Exchange Commission ("SEC") to do so. They're both regulating US financial markets to protect investors but they are different.

    FINRA is an independent securities regulator which among other things monitors US equities markets and supervises brokers. (It was previously known as the National Association of Securities Dealers ("NASD") until NASD consolidated with the member regulation, enforcement and arbitration functions of the New York Stock Exchange in 2007.)

    It is a separate entity from the SEC which was established to, among other things, enforce the US federal securities laws and issue or amend rules. The SEC also oversees private regulatory organisations, such as FINRA. It is the SEC which may suspend trading in any stock under the Securities Exchange Act of 1934, a federal securities law.

    See here for the SEC's trading suspension release concerning CYNK:

    Werner R. Kranenburg, attorney-at-law and FINRA Dispute Resolution arbitrator
    Sep 16, 2014. 02:37 PM | Likes Like |Link to Comment
  • Moody's And S&P: Lawsuits Can Be A Good Thing For The Value Investor [View article]
    Days before the government sued had private shareholders sprung into action already. The shareholders' legal action has seen an important win in court last week.

    The Department of Justice filed its complaint against MHFI and S&P in a California federal court on the 4th of February 2013. Two MHFI shareholders, a retirement plan and a private investor ("petitioners"), had filed their petition in a New York state court on 31 January.

    The petitioners were looking to enforce their rights under New York laws to inspect certain books and records of MHFI to investigate alleged misconduct by management and identify who may be held responsible for such wrongdoing. (MHFI is incorporated in the State of New York.)

    Last week, a New York appellate court held (see quote below) that shareholder-petitioners' right of inspection is broader than argued by respondent-MHFI and they are entitled to more materials which MHFI had previously refused to produce. The case has been sent back to the trial court for a hearing on the proper scope of the inspection.

    Werner R. Kranenburg, attorney-at-law

    Shareholders' Petition:
    Appellate Opinion:
    Reuters 12 Sep 2014:
    Justice's Complaint:

    From the appellate court's opinion:

    "Under New York law, shareholders have both statutory and common-law rights to inspect a corporation's books and records so long as the shareholders seek the inspection in good faith and for a valid purpose... [...]

    Specifically, the petition alleges that petitioners seek to investigate alleged mismanagement and breaches of fiduciary duty by respondent's board of directors in failing to oversee purported wrongdoing by S&P; this alleged wrongdoing, petitioners assert, exposed respondent to substantial potential liability in multiple civil actions and investigations. These allegations form a proper basis for petitioners' request. [...]

    Contrary to respondent's contentions, investigating alleged misconduct by management and obtaining information that may aid legitimate litigation are, in fact, proper purposes for a [New York Business Corporation Law] § 624 request, even if the inspection ultimately establishes that the board had engaged in no wrongdoing." (citations omitted)

    Retirement Plan for General Employees of the City of North Miami Beach, et al., Petitioners-Appellants, v. The McGraw-Hill Companies, Inc., Respondent-Respondent, New York Supreme Court, Appellate Division, First Department

    Please note the above is for informational purposes only and is not legal advice.
    Sep 15, 2014. 12:01 PM | Likes Like |Link to Comment
  • HSBC reportedly settles FHFA mortgage claims [View news story]
    This news report contains a number of errors.

    According to the FHFA, Goldman Sachs was the sixteenth (and thus not the fifteenth) to settle the case against it.

    States the FHFA: "This is the sixteenth settlement reached in the 18 PLS lawsuits​ FHFA filed in 2011. Three cases remain outstanding and FHFA is committed to satisfactory resolution of those actions." That makes HSBC the seventeenth bank to settle.

    HBSC now having indeed settled its case leaves two cases outstanding: Nomura is not the lone bank not to have settled, but also Royal Bank of Scotland is still headed for trial.
    HSBC: (StockTalk

    Werner R. Kranenburg, attorney-at-law
    Sep 15, 2014. 08:17 AM | Likes Like |Link to Comment
  • Shareholder lawsuit over Botox revived [View news story]
    Just to clarify two things in my previous reply, concerning the allegations made against the board of AGN and the business judgment rule.

    Where I wrote "AGN's directors allegedly knew about limits..." I was referring to the allegations made by the shareholder-plaintiffs. These allegations are not mine.

    Well within the area of corporate law, in litigation where a company's leadership is scrutinised whether it acted in the best interest of the company, the business judgment rule is a standard a court may be apply to review and to judge the challenged director action. In Delaware, "[a] board of directors enjoys a presumption of sound business judgment" and the burden is on the shareholder-plaintiffs to prove that the directors breached their duties to the company.

    The news is that the Ninth Circuit Court of Appeals has held, as the Delaware Chancery Court previously, that plaintiffs' suit may proceed as their allegations established a reasonable doubt as to whether AGN's directors did the right thing and are protected by this rule. I understand you disagree with these courts' opinions.

    Werner R. Kranenburg, attorney-at-law

    Cornell University Law School's definition of the business jugdment rule and see Delaware's Sinclair Oil Corp v. Levien, and Cede & Co. v. Technicolor Inc. among other cases.
    (Please note this comment, as my previous comments, is for informational purposes only, is not a comprehensive overview of all the issues raised and is not intended as, nor should it be taken as, legal advice which would be tailored to one's specific facts.)
    Sep 14, 2014. 07:32 PM | Likes Like |Link to Comment