On October 13, 2021, Stephen Bushansky (“Plaintiff”), represented by Joel E. Elkins of WeissLaw LLP, filed a civil action against Square, Inc. (“Square” or the “Company”), Randy Garutti (“Garutti”), Mary Meeker (“Meeker”), Lawrence Summers (“Summers”) and Ors. (collectively, the “Board” or the “Individual Defendants”), seeking injunctive relief and damages for the alleged violation of federal securities laws by the Defendants. This case was filed in U.S. District Court in the Northern District of California with Judge Jacqueline Scott Corley presiding.
In the complaint the Plaintiff alleged that, “This is an action brought by Plaintiff against Square, Inc. and the members of Square’s Board of Directors (the “Board” or the “Individual Defendants”) for their violations and to enjoin the vote on a proposed transaction, pursuant to which Square will acquire Afterpay Limited (“Afterpay”) through Square’s subsidiary Lanai (AU) 2 Pty Ltd. (“Merger Sub”) (the “Proposed Transaction”). On August 1, 2021, Square and Afterpay issued a joint press release announcing that they had entered into a Scheme Implementation Deed dated August 2, 2021 (the “Merger Agreement”) to sell Afterpay to Square.”
The Plaintiff further alleged that, “Under the terms of the Merger Agreement, each share of
Afterpay common stock will be converted into the right to receive either: (i) 0.375 shares of Square Class A common stock (“New Square Shares”), or (ii) 0.375 CHESS Depositary Interests (“New Square CDIs”) representing ownership interest in shares of Square Class A common stock issued by Square pursuant to a Deed Poll to be executed by Square and Merger Sub in favor of all Afterpay shareholders (“Deed Poll”) (the “Merger Consideration”). The Proposed Transaction is valued at approximately $29 billion.”
The Plaintiff also alleged that, “On October 5, 2021, Square filed a Schedule 14A Definitive Proxy Statement (the “Proxy Statement”) with the SEC. The Proxy Statement, which recommends that Square stockholders vote in favor of the Proposed Transaction, omits or misrepresents material information concerning, among other things: (i) the data and inputs underlying the financial valuation analyses that support the fairness opinion provided by the Company’s financial advisor Morgan Stanley & Co. LLC (“Morgan Stanley”); and (ii) the background of the Proposed Transaction. Defendants authorized the issuance of the false and misleading Proxy Statement in violation of Sections 14(a) and 20(a) of the Exchange Act. Unless remedied, Square’s public stockholders will be irreparably harmed because the Proxy Statement’s material misrepresentations and omissions prevent them from making a sufficiently informed voting decision on the Proposed Transaction.”
There are two claims for relief laid down by the Plaintiff. The first claim is for the alleged violations of Section 14(a) of the Exchange Act and Rule 14a-9 Promulgated Thereunder. The second claim is for the alleged violations of Section 20(a) of the Exchange Act.
In its prayer for relief the Plaintiff has requested the Court to preliminarily and permanently enjoin defendants and all persons acting in concert with them from proceeding with, consummating, or closing the Proposed Transaction and any vote on the Proposed Transaction, unless and until defendants disclose and disseminate the material information identified above to Square stockholders; declare that defendants violated Sections 14(a) and/or 20(a) of the Exchange Act, as well as SEC Rule 14a-9 promulgated thereunder; and award Plaintiff the costs of this action along with such other and further relief as the Court may deem just and proper.
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Pending - Other Pending
Jacqueline Scott Corley
Joel E. Elkins
Attorney at WeissLaw LLP
9100 Wilshire Boulevard, Suite 725 E.
Beverly Hills, CA 90210
Civil Cover Sheet
List of Defendants
Docket(#6) Summons Issued as to Roelof Botha, Amy Brooks, Shawn Carter, Paul Deighton, Jack Dorsey, Randy Garutti, James McKelvey, Mary Meeker, Anna Patterson, Square, Inc., Lawrence Summers, David Viniar, Darren Walker. (dhmS, COURT STAFF) (Filed on 10/13/2021) (Entered: 10/13/2021)Read MoreRead Less
Docket(#5) Initial Case Management Scheduling Order with ADR Deadlines: Case Management Statement due by 1/6/2022. Initial Case Management Conference set for 1/13/2022 01:30 PM in San Francisco, Courtroom E, 15th Floor. (dhmS, COURT STAFF) (Filed on 10/13/2021) (Entered: 10/13/2021)Read MoreRead Less
Docket(#4) Case assigned to Magistrate Judge Jacqueline Scott Corley. Counsel for plaintiff or the removing party is responsible for serving the Complaint or Notice of Removal, Summons and the assigned judge's standing orders and all other new case documents upon the opposing parties. For information, visit E-Filing A New Civil Case at http://cand.uscourts.gov/ecf/caseopening.Standing orders can be downloaded from the court's web page at www.cand.uscourts.gov/judges. Upon receipt, the summons will be issued and returned electronically. Counsel is required to send chambers a copy of the initiating documents pursuant to L.R. 5-1(e)(7). A scheduling order will be sent by Notice of Electronic Filing (NEF) within two business days. Consent/Declination due by 10/27/2021. (bwS, COURT STAFF) (Filed on 10/13/2021) (Entered: 10/13/2021)Read MoreRead Less
Docket(#3) Certificate of Interested Entities by Stephen Bushansky (Elkins, Joel) (Filed on 10/13/2021) (Entered: 10/13/2021)Read MoreRead Less
Docket(#2) Proposed Summons. (Attachments: #1 List of Defendants)(Elkins, Joel) (Filed on 10/13/2021) (Entered: 10/13/2021)Read MoreRead Less
Docket(#1) COMPLAINT against Roelof Botha, Amy Brooks, Shawn Carter, Paul Deighton, Jack Dorsey, Randy Garutti, James McKelvey, Mary Meeker, Anna Patterson, Square, Inc., Lawrence Summers, David Viniar, Darren Walker ( Filing fee $ 402, receipt number 0971-16492649.). Filed byStephen Bushansky. (Attachments: #1 Civil Cover Sheet)(Elkins, Joel) (Filed on 10/13/2021) (Entered: 10/13/2021)Read MoreRead Less
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