Xerox shareholders are urging a New York court to maintain its injunction on the terminated $6.1 billion merger agreement between the Norwalk-headquartered company and Fujifilm Holdings Corp.
According to a report in Law360, New York County Judge Barry R. Ostrager blocked the merger in April after shareholders led by Carl Icahn and Darwin Deason argued that then-CEO Jeff Jacobson negotiated the merger with Fuji in defiance of instructions from the Xerox board. Jacobson and five Xerox board members resigned one month later, and new leadership took control of the company. Fujifilm Holdings filed a $1 billion lawsuit against Xerox in federal court, claiming that the leadership change at Xerox was an “attempt” to withdraw from the agreement negotiated by Jacobson.
However, Xerox shareholder counsel Richard Marooney of King & Spalding LLP stated that Fuji would attempt to enforce the terminated merger deal if the injunction was removed. “That is why this is the steal of the century” for Fuji, Marooney said. “That is why they so desperately want to get this injunction lifted.”
However, a panel of four New York County judges hearing the case raised doubts on keeping the injunction in place if Xerox was under new leadership. “The CEO is out, the board is changed, so why then the preliminary injunction?” asked Justice Dianne T. Renwick.
Fuji counsel Eamon Joyce of Sidley Austin LLP told the New York County panel that maintaining the injunction made little sense because “everything this injunction was founded on hasn’t come to pass. There’s absolutely no reason to keep this injunction in place this many months on.”
