In an order dated May 30, 2012, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York granted summary judgment to the Firm’s clients, Sirius XM Radio Inc. and Mel Karmazin, the Company’s Chief Executive Officer, as well as the remaining co-defendants, all current and former directors of the Sirius XM Board, in a shareholder derivative action captioned Shenk v. Karmazin et al., No. 11 Civ. 2943(JSR) (S.D.N.Y.).
The complaint in Shenk v. Karmazin et al. asserted violations of Section 10(b) of the Securities and Exchange Act of 1934, as well as claims for breach of fiduciary duty. The shareholder-plaintiff alleged that in order to gain regulatory and shareholder approval of the 2008 merger of Sirius and XM, the defendants knowingly made false and misleading representations to federal regulators and shareholders that the merger would not have anti-competitive effects on the market for satellite subscription services and would not lead to an increase in prices for consumers. The shareholder-plaintiff further asserted that the defendants breached their fiduciary duties by approving a subsequent financing transaction with an affiliate of Liberty Media Corporation in 2009, and rejecting a purportedly more favorable financing proposal from Charles Ergen of Dish Network in order to serve their own interests, rather than those of the shareholders.
The defendants jointly filed a motion for summary judgment, asserting that the shareholder-plaintiff had failed to present evidence of any misrepresentations made in connection with the Sirius-XM merger, or that the Sirius XM Board did not approve the 2009 transaction with Liberty Media in good faith. Oral argument on defendants’ summary judgment motion was held before Judge Rakoff on April 10, 2012. Judge Rakoff granted defendants’ motion in all respects on May 30, 2012.
The Simpson Thacher team consisted of Bruce D. Angiolillo, Mary Elizabeth McGarry, Susannah S. Geltman, Jacob Press, Patrick Connorton and Tara Kelly. Bruce Angiolillo argued the summary judgment motion on behalf of all defendants.