Summary
Dell Technologies Inc. (DELL) announced on November 15, 2022, that it has reached an agreement to settle a previously disclosed lawsuit. This litigation arose from the company's 2018 Class V transaction, where Dell paid $14.0 billion in cash and issued shares to holders of its Class V common stock. The lawsuit alleged that certain directors and stockholders, including Michael S. Dell and Silver Lake Group, breached their fiduciary duties by offering a transaction value allegedly billions of dollars below fair value to the former Class V stockholders. The proposed settlement requires Dell to pay a total of $1.0 billion, which will cover all plaintiff class costs, expenses, and fees. This settlement amount is expected to be paid by the company and/or its insurers on behalf of the defendants, pursuant to existing indemnification obligations. The settlement is subject to the approval of the Delaware Court of Chancery and the execution of a definitive settlement agreement. If approved, the settlement amount will be recognized in the company's fiscal third quarter results.
Key Highlights
- 1Dell Technologies has agreed to a $1.0 billion settlement to resolve a class-action lawsuit related to its 2018 Class V transaction.
- 2The lawsuit alleged fiduciary duty breaches by directors and certain stockholders concerning the valuation of the Class V transaction.
- 3The settlement amount includes all costs, expenses, and fees for the plaintiff class.
- 4The settlement payment is expected to be borne by Dell and/or its insurers, based on indemnification obligations.
- 5A special committee of Dell's board, with independent counsel, has determined that the defendants are entitled to indemnification.
- 6The settlement is contingent upon final approval by the Delaware Court of Chancery and the execution of a definitive agreement.
- 7The $1.0 billion settlement will be reflected in Dell's fiscal third quarter financial results.