SOHJ represents clients ranging from individuals to publicly traded and privately held companies, as well as private equity firms, hedge funds and financial institutions in a broad range of corporate and securities litigation matters. Our lawyers have successfully asserted and defended a wide variety of claims, including securities fraud class actions (including 10b-5 and Section 11 cases), merger challenge lawsuits, shareholder derivative actions, shareholder oppression cases, fiduciary duty litigation, ERISA stock drop class actions, and master limited partnership litigation. Our lawyers have also defended clients in insider trading and accounting fraud investigations brought by the Securities and Exchange Commission and regularly provide advice on corporate governance matters.

In many instances, we have been able to obtain the dismissal of 10b-5 and Section 11 class actions for our corporate clients at the motion to dismiss stage. In large cases that often involve analyzing millions of documents, we employ cutting-edge document management technology to help manage matters expeditiously and cost effectively.

Each year, since 2007, a member of our corporate and securities team has been recognized as a securities litigation leader by Chambers USA: America’s Leading Business Lawyers.

REPRESENTATIVE MATTERS:

SECTION 10(b) AND SECTION 11 STOCK DROP ACTIONS (AND RELATED DERIVATIVE ACTIONS)

• Defending a gas exploration and production company and certain of its officers and directors in a securities fraud class action and related shareholder derivative actions claiming breach of fiduciary duty involving alleged material misstatements in certain financial statements. Cases have been filed in Oklahoma and Delaware seeking more than $200 million in damages as a result of the alleged drop in stock price. We successfully removed the securities action to federal court and defeated plaintiffs’ motion to remand. After we moved to dismiss, plaintiffs dropped their claims regarding the stock offering materials, which eliminated more than $100 million in potential liability. Our motion to dismiss the remaining claims based on lack of material misstatements and lack of loss causation is pending. Northumberland County Retirement System v. GMX Resources, Inc., 810 F. Supp.2d 1282 (W.D. Okla. Nov. 16, 2011).
• Obtained dismissal of 10b-5 and Section 11 class action at motion to dismiss stage filed against Blockbuster and certain of its officers and directors arising from Blockbuster’s split-off from Viacom, Inc. Also obtained dismissal of related state law claims asserted in the class action suit filed in the Delaware Chancery Court and related ERISA stock drop class action). Pfeffer v. Redstone, et al, 2008 WL 308450 (Del. Ch. Feb. 1, 2008); Congregation Ezra Sholom v. Blockbuster Inc., et al, 504 F. Supp.2d 151 (N.D. Tex. 2007); Halaris v. Viacom, Inc., 2008 WL 3855044 (N.D. Tex. Aug. 19, 2008).
• Represented Heelys, Inc. in a securities class action, derivative actions, and individual shareholder lawsuits arising from a drop in stock price after an IPO. The cases were settled to the client’s satisfaction. Rines v. Heelys, Inc., 2009 WL 5196519 (N.D. Tex. Nov. 17, 2009).
• Obtained dismissal of 10b-5 claims against hospice care provider after market capitalization dropped $300 million (as well as dismissal of companion state and federal court derivative actions). In re: Odyssey Healthcare, Inc. Securities Litig., 424 F. Supp.2d 880 (N.D. Tex. 2005) and 2006 WL 826467 (N.D. Tex. 2006); Hanson v. Odyssey Healthcare, Inc., 2007 WL 5186795 (N.D. Tex. Sept. 21, 2007); Connolly v. Gasmire, et al., 257 S.W.3d 831 (Tex. App. – Dallas, July 2, 2008).
• Obtained dismissal of 10b-5 and Section 11 claims against mobile phone service provider after drop in subscribers and revenues (as well as dismissal of companion state and federal court derivative actions).
• Obtained dismissal of 10b-5 claims against a Big-Four accounting firm arising from its client’s restatement of earnings. In re Carreker Corporation Securities Litig., No. 3:03-CV-0250-M (N.D. Tex. Mar. 29, 2005).
• Obtained dismissal of 10b-5 claims against Blockbuster after drop in revenues and loss of $2 billion in market capitalization (as well as dismissal of companion state court derivative action). In re: Blockbuster Inc. Securities Litig., Fed. Sec. L. Rep. ¶92,806 (N.D. Tex. 2004).
• Defeated class certification in securities fraud action asserted against a Big-Four accounting firm based on the plaintiffs’ inability to demonstrate a fraud-on-the-market classwide presumption of reliance. In re Seitel, Inc. Securities Litigation, 245 F.R.D. 263 (S.D. Tex. 2007).

MERGER CHALLENGE LITIGATION

• Represented the conflicts and governance committee of a publicly traded MLP, defeated a motion to expedite Texas litigation seeking to enjoin the MLP’s $2.5 billion acquisition by its majority unitholder. The merger closed, and plaintiffs subsequently withdrew their claims. Lonergan v. EPE Holdings LLC, et al., 5 A.3d 1008 (Del. Ch. 2010).
• Represented a subsea pipeline company and its officers and directors in Texas and Louisiana state and federal courts challenging the company’s acquisition for $1 billion. The case settled on satisfactory terms that allowed the merger to close.

MASTER LIMITED PARTNERSHIP (MLP) LITIGATION

• Defeated a motion to expedite proceedings seeking to enjoin an MLP’s acquisition of its general partner. The merger closed after the plaintiffs voluntarily dismissed their claims. Davis v. Duncan Energy Partners L.P., 801 F. Supp.2d 589 (S.D. Tex. 2011).
• Representing a limited partnership as nominal defendant in a derivative action in Texas state court challenging the limited partnership’s acquisition of certain assets from its general partner.

SHAREHOLDER OPPRESSION AND RELATED ACTIONS

• Defending an investment fund manager in Texas state court against shareholder oppression and waste claims, among other claims, under Delaware law. We successfully compelled arbitration of certain affirmative claims asserted by the minority owner and CEO of the oil and gas exploration company in which our client invested $80 million.
• Representing a private equity fund, its principal, and affiliates in a $50 million shareholder oppression lawsuit filed by the former CEO and minority shareholders of a bank holding company in which our client purchased a majority interest and holds an 80% stake.
• Representing a medical staffing company in a breach of contract and fraud action and related shareholder oppression dispute with several minority shareholders. In addition to assisting our client in avoiding a shareholder’s attempt to place the company into receivership, we obtained a temporary restraining order precluding another of the company’s minority shareholders and a former employee from competing against our client and otherwise using our client’s confidential and proprietary information.

OTHER CORPORATE GOVERNANCE AND SECURITIES LITIGATION

• Representing a publicly traded healthcare company in a fraud and breach of fiduciary duty case against a financial advisory firm that assisted our client in going public. Based on the financial advisory firm’s failure to make sufficient efforts to place stock with investors, our client seeks in excess of $3 million in damages and the return of several million shares of our client’s stock that defendants were provided in consideration for their supposed underwriting efforts.
• Representing an energy investment fund in asserting claims against co-founders and principals of a portfolio company for theft of corporate opportunity and misappropriation of corporate assets from the portfolio company, including defending against counterclaims by defendants seeking advancement of litigation expenses under the terms of the limited liability company agreement.
• Represented one of the top five American coal producers and its CEO in litigation related to the coal producer’s purchase of stock of a Gulf Coast energy storage and transportation company. The lawsuit principally involved claims among the majority interest owners of the storage and transportation company regarding who owned the majority of the shares, poison pill issues, corporate governance, and alleged shareholder oppression. Certain of the shareholders asserted third-party claims against our clients for contribution, tortious interference, and other claims. After the claims among the majority shareholders were settled, all claims against our clients were dismissed without any payment being made by our clients.