Grant & Eisenhofer secured $3.19 billion in additional cash consideration for Caremark shareholders in CVS merger
Plaintiff(s):
Louisiana Municipal Police Employees’ Retirement System and The R.W. Grand Lodge of Free & Accepted Masons of Pennsylvania
Case type / claims:
Shareholder derivative action challenging Caremark’s Board of Directors for breaches of fiduciary duty in negotiating and approving a merger agreement with CVS, including rejection of a superior competing proposal.
Defendant(s):
Caremark Rx, Inc., its Board of Directors and CVS, Inc.
Jurisdiction:
Delaware Court of Chancery
Year:
2007
Outcome:
- Litigation prompted substantial additional disclosures to shareholders and renegotiation of the merger agreement.
- Resulted in an additional $3.19 billion in cash consideration to Caremark shareholders.
- Case reinforced directors’ fiduciary duties to maximize shareholder value in change-of-control transactions.
