Cypress Semiconductor and Ramtron Prevail in Shareholder Litigation
On June 30, 2014, the Delaware Court of Chancery granted a motion to dismiss a shareholder complaint stemming from firm client Cypress Semiconductor's acquisition of Ramtron, a maker of specialized semiconductor products.
The complaint was the latest volley in a long-running battle between former Ramtron shareholders and the company, its directors, and Cypress arising out of Cypress' 2012 acquisition of Ramtron. Cypress made an unsolicited offer to acquire Ramtron in June 2012, and in November 2012 the two companies agreed to a merger. Shortly thereafter, shareholders sued Ramtron, its directors, and Cypress in an effort to block the acquisition, a motion that was denied by the Court of Chancery. Subsequent motions followed, with the plaintiffs alleging that Ramtron and its directors had breached their fiduciary duties by failing to engage in a competitive sales process that maximized shareholder value and by not fully disclosing material information to stockholders, and that Cypress had aided and abetted the alleged breach of fiduciary duty by Ramtron and its directors.
In March 2014, Ramtron and Cypress each moved to dismiss the complaint on the grounds that the plaintiffs had failed to state a claim upon which relief could be granted. The court agreed, dismissing the complaint with prejudice at the pleading stage, a rare occurrence in the Court of Chancery.
To learn more, please see the court's opinion.