Ticker Symbol: NYSE: ORCL
Practice: Securities Fraud & Shareholder Litigation
On August 30, 2016, Chimicles & Tikellis LLP, on behalf of the Southeastern Pennsylvania Transportation Authority, made a books and records demand (the “Demand”) on Oracle Corporation (“Oracle” or the “Company”) pursuant to 8 Del. C. § 220 to investigate breaches of fiduciary duty and mismanagement by the Oracle Board of Directors in connection with Oracle’s announced acquisition (“Transaction”) of Netsuite, Inc. (“Netsuite”), a company founded and 47% owned (directly and indirectly) and controlled by Lawrence J. Ellison (“Ellison”), Oracle’s CEO and largest shareholder. Oracle subsequently produced books and records (the “Section 220 Documents”) pursuant to a confidentiality agreement.
After receiving and reviewing the Section 220 documents, on May 3, 2017 Chimicles & Tikellis filed a Verified Shareholder Derivative Complaint (public version available here) in the Court of Chancery of the State of Delaware (the “Action”). The Action alleges wrongdoing and breaches of fiduciary duty against Ellison and certain of the Oracle board of directors for providing special benefits to Ellison and his family. The Action alleges that Ellison, with the help of his loyalists in Oracle’s senior management, took advantage of Oracle’s need for a cloud-technology-based acquisition and used Oracle’s money to overpay for NetSuite to unjustly enriching himself and his family, receiving nearly $4 billion from the Transaction. The Action also alleges that the special committee of the board of directors, formed to review and approve the Transaction, consisted of a majority of directors with extensive personal and business relationships with Ellison and his family, which precluded them from fairly evaluating the Transaction.
Defendants are due to respond to the complaint on July 19, 2017.