Paul, Weiss won the dismissal of a lawsuit brought in New York Supreme Court, Oneida County, against international bowling chain Bowlmor AMF Corp., two of its subsidiaries, its officers and directors and certain shareholders. The plaintiffs – 72 former employees who had been terminated and had filed age discrimination claims with the Equal Employment Opportunity Commission – sued to force the defendants to unwind two recent share repurchase transactions totaling $180 million and claimed other unspecified relief.
The plaintiffs’ novel theory was that someday in the future they might actually file age discrimination lawsuits and might win those claims and any appeals, but would be unable to collect their judgments because the share repurchases allegedly left Bowlmor insolvent.
In May 2018, Paul, Weiss moved to dismiss all of plaintiffs’ claims, arguing among other things, that the plaintiffs lacked standing to sue, as no discrimination lawsuits had actually been filed (let alone judgments received); that their claims were filed under the wrong state’s law and inapplicable statutes; that the plaintiffs failed to meet the pleading requirements for bringing a derivative suit; that the challenged decisions were protected by the business judgment rule; and that Bowlmor was not, in fact, rendered insolvent by the share repurchases. Defendants also moved for sanctions against plaintiffs’ counsel.
In granting the motion to dismiss all 18 claims, state Supreme Court Justice Patrick Macrae adopted nearly all of Paul, Weiss’s arguments. He also levied sanctions against the plaintiffs’ attorney for frivolous conduct including plaintiffs’ counsel’s “questionable legal strategies” and his strategy of continuing to “press irrelevant and contradictory theories for no clear purpose other than to force defendants to the bargaining table by holding them hostage with the threat of punishing financial hardship.”
The Paul, Weiss team included litigation partners Jack Baughman (Picture) and Jaren Janghorbani and counsel Farrah Berse.
Law Firms: Paul Weiss Rifkind Wharton & Garrison;
Clients: Bowlmor AMF Corp.;