MultiPlan shareholders counter 'desperate' attempts to dismiss suit

REUTERS/Andrew Kelly
  • Shareholders say defendants misportraying suit as derivative

MultiPlan shareholders on Monday called the company and blank check firm Churchill Capital Corp III's attempts to dismiss a proposed class action over the companies’ $11 billion merger "desperate" and said they were mischaracterizing the nature of the lawsuit.

The investors, led by Kwame Awo and represented by Bernstein Litowitz Berger & Grossmann, urged Vice Chancellor Morgan Zurn to reject motions to dismiss the lawsuit by MultiPlan and Churchill.

The shareholders have argued that the 2020 merger was “value-destructive” and riddled with conflicts of interest.

“Unable to confront this clear premise, defendants concocted the case they wished they were facing,” the shareholders said.

“At bottom, however, none of Defendants’ arguments address Plaintiffs’ actual Complaint, much less justify its dismissal.”

The shareholder’s lead attorney, Mark Lebovitch of Bernstein Litowitz Berger & Grossmann, did not immediately respond to requests for comment on Tuesday. Neither did counsel for MultiPlan and the Churchill defendants, which are represented by Simpson Thacher & Bartlett and Weil, Gotshal & Manges, respectively.

Awo sued health care management software business MultiPlan, Churchill and several of the SPAC’s leaders, including CEO and former Citigroup executive Michael Klein over the merger in March. That suit was consolidated with another investor’s the following month.

The companies have denied any wrongdoing.

In urging the judge to dismiss the suit, the Churchill and MultiPlan defendants argued that the complaint actually pursues derivative claims. They say the transaction was not conflicted and that the investors never demanded that the company investigate the merger as Delaware law requires for such claims.

The case is In Re Multiplan Corp. Stockholders Litigation, Delaware Court of Chancery, No. 2021-0300.

For the shareholders: Mark Lebovitch and Gregory Varallo of Bernstein Litowitz Berger & Grossmann;

For MultiPlan: Jonathan Youngwood and Stephen Blake of Simpson Thacher & Bartlett;

For Churchill executives and directors: John Neuwirth, Joshua Amsel and Evert Christensen of Weil, Gotshal & Manges

Read more:

MultiPlan merges with Churchill Capital to go public in $11 billion deal

MultiPlan shareholder alleges SPAC deal tainted by fraud

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Sierra Jackson reports on legal matters in major mergers and acquisitions, including deal work, litigation and regulatory changes.