WSGR Defeats Motion to Enjoin Merger Due to "Don't Ask, Don't Waive" Provision in Standstill Agreement
On March 15, 2013, Judge David Kurtz of the Superior Court for Snohomish County, Washington, denied the plaintiffs' motion to enjoin a stockholder vote regarding Honeywell International's proposed acquisition of Intermec for $600 million in cash. Wilson Sonsini Goodrich & Rosati represents Intermec and its board of directors in this litigation.
The plaintiffs' motion sought, among other things, to enjoin the proposed acquisition due to so-called "Don't Ask, Don't Waive" standstill provisions contained in nondisclosure agreements with certain interested parties. "Don't Ask, Don't Waive" provisions generally prohibit the interested party from requesting, either publicly or privately, that the target company later waive the standstill. The plaintiffs alleged that the defendants breached their fiduciary duties by using "Don't Ask, Don't Waive" provisions and by not specifically disclosing their existence in the definitive proxy statement.
This is a significant decision for those engaged in mergers and acquisitions, as it appears to be the first denial of a preliminary injunction motion requesting modification or disclosure of "Don't Ask, Don't Waive" provisions since the Delaware Chancery Court's decisions in Celera, Complete Genomics, and Ancestry.com.
The WSGR team representing Intermec and its board of directors in the matter is comprised of Barry Kaplan, Doug Clark, Greg Watts, T.J. Martin, John Roberts, Stephanie Jensen, Walker Newell, Diana Lopez, and Jenny Lo.