Brookfield Asset Management’s Stockholder Class Action

Weil, Gotshal & Manges LLP successfully represented Brookfield Asset Management in the class action.

Brookfield Asset Management won a consolidated stockholder class action in the Delaware Court of Chancery, securing complete dismissal of all claims relating to Brookfield’s 2018 acquisition of the approximately 65% of GGP, Inc. common stock that it did not already own. The court’s ~100-page decision denied all of the plaintiffs’ six counts in accordance with Weil’s arguments, upheld the propriety of the parties’ deal negotiations and brought three years of litigation to a resoundingly successful close.

In their consolidated amended complaint, the plaintiffs alleged numerous claims in connection with the transaction, including that Brookfield controlled GGP and breached its fiduciary duties to GGP as an alleged controlling stockholder. 

Following extensive briefing and oral argument, the court held that Brookfield did not control GGP either generally or in connection with the transaction and, thus, did not owe fiduciary duties to GGP’s stockholders. The court dismissed the plaintiffs’ remaining claims under the business judgment rule because the court held that the transaction was approved by a fully informed and uncoerced vote of GGP’s stockholders.

In addition to agreeing with Brookfield’s arguments regarding Delaware controlling stockholder jurisprudence, the court also rejected numerous challenges to the disclosures in the transaction’s proxy statement – what the court called “a laundry list of purportedly ‘material’ facts omitted from, or misleadingly described in, the Proxy” – including, most significantly, the plaintiffs’ argument that additional information should have been disclosed regarding appraisal rights in light of the transaction structure, which included the payment of a substantial pre-closing dividend.

Brookfield Asset Management is a leading global alternative asset manager with over $600 billion of assets under management across real estate, infrastructure, renewable power, private equity and credit. Our objective is to generate attractive long-term risk-adjusted returns for the benefit of our clients and shareholders.

GGP Inc was an American commercial real estate company and the second- largest shopping mall operator in the United States. On August 28th, 2018, GGP Inc. became the retail arm of Brookfield Properties. 

The Weil team was led by Co-Head of Weil’s Securities Litigation practice John Neuwirth (Picture), who argued the motion, and Securities Litigation partner Evert Christensen, and also included counsel Seth Goodchild and Matthew Connors, and associates Elizabeth Sytsma, Alexandra Jung, and Zander Weiss.

Involved fees earner: Evert Christensen – Weil, Gotshal & Manges; Matthew Connors – Weil, Gotshal & Manges; Alexandra D’Errico Jung – Weil, Gotshal & Manges; Seth Goodchild – Weil, Gotshal & Manges; John Neuwirth – Weil, Gotshal & Manges; Elizabeth Sytsma – Weil, Gotshal & Manges; Zander Weiss – Weil, Gotshal & Manges;

Law Firms: Weil, Gotshal & Manges;

Clients: Brookfield Asset Management Inc;

Author: Martina Bellini

Brookfield Asset Management’s Stockholder Class Action

Weil, Gotshal & Manges LLP successfully represented Brookfield Asset Management in the class action.

Brookfield Asset Management won a consolidated stockholder class action in the Delaware Court of Chancery, securing complete dismissal of all claims relating to Brookfield’s 2018 acquisition of the approximately 65% of GGP, Inc. common stock that it did not already own. The court’s ~100-page decision denied all of the plaintiffs’ six counts in accordance with Weil’s arguments, upheld the propriety of the parties’ deal negotiations and brought three years of litigation to a resoundingly successful close.

In their consolidated amended complaint, the plaintiffs alleged numerous claims in connection with the transaction, including that Brookfield controlled GGP and breached its fiduciary duties to GGP as an alleged controlling stockholder. 

Following extensive briefing and oral argument, the court held that Brookfield did not control GGP either generally or in connection with the transaction and, thus, did not owe fiduciary duties to GGP’s stockholders. The court dismissed the plaintiffs’ remaining claims under the business judgment rule because the court held that the transaction was approved by a fully informed and uncoerced vote of GGP’s stockholders.

In addition to agreeing with Brookfield’s arguments regarding Delaware controlling stockholder jurisprudence, the court also rejected numerous challenges to the disclosures in the transaction’s proxy statement – what the court called “a laundry list of purportedly ‘material’ facts omitted from, or misleadingly described in, the Proxy” – including, most significantly, the plaintiffs’ argument that additional information should have been disclosed regarding appraisal rights in light of the transaction structure, which included the payment of a substantial pre-closing dividend.

Brookfield Asset Management is a leading global alternative asset manager with over $600 billion of assets under management across real estate, infrastructure, renewable power, private equity and credit. Our objective is to generate attractive long-term risk-adjusted returns for the benefit of our clients and shareholders.

GGP Inc was an American commercial real estate company and the second- largest shopping mall operator in the United States. On August 28th, 2018, GGP Inc. became the retail arm of Brookfield Properties. 

The Weil team was led by Co-Head of Weil’s Securities Litigation practice John Neuwirth (Picture), who argued the motion, and Securities Litigation partner Evert Christensen, and also included counsel Seth Goodchild and Matthew Connors, and associates Elizabeth Sytsma, Alexandra Jung, and Zander Weiss.

Involved fees earner: Evert Christensen – Weil, Gotshal & Manges; Matthew Connors – Weil, Gotshal & Manges; Alexandra D’Errico Jung – Weil, Gotshal & Manges; Seth Goodchild – Weil, Gotshal & Manges; John Neuwirth – Weil, Gotshal & Manges; Elizabeth Sytsma – Weil, Gotshal & Manges; Zander Weiss – Weil, Gotshal & Manges;

Law Firms: Weil, Gotshal & Manges;

Clients: Brookfield Asset Management Inc;

Author: Martina Bellini