Skadden, Arps, Slate, Meagher & Flom LLP secured a victory for Dentsply Sirona Inc. in the case.
The U.S. District Court for the District of Delaware issued a report and recommendation for a complete dismissal with prejudice, of all claims in a stockholder derivative action pending in the U.S. District Court for the District of Delaware against current and former members of the Dentsply board of directors and nominal Defendant Dentsply Sirona Inc.
The plaintiffs, two purported stockholders of Dentsply, alleged that the company had made materially false and misleading statements relating to the company’s financial position and future prospects that were purportedly inflated due to an alleged price-fixing scheme among three industry distributors and an inventory build-up resulting from a distribution agreement with one of those distributors. The complaint included claims for breach of fiduciary duty for failure of oversight, false and misleading proxy statements under Sections 10(b), 14(a), and 20(a) of the Securities Exchange Act, waste of corporate assets, and unjust enrichment. The opinion is attached.
In the report and recommendation, Magistrate Judge Fallon recommended dismissal of the entire case with prejudice. The court held that the plaintiffs had failed to plead particularized factual allegations demonstrating that any member of the Dentsply board faced a substantial likelihood of liability on any of the claims in the complaint. Therefore, the requirement under Delaware law to bring a litigation demand to the Dentsply board was not excused, which was dispositive of all claims. In addition to holding that demand was not excused on the Dentsply board for the plaintiffs’ claims under the Securities Exchange Act, the court also held that the plaintiffs’ securities law claims were also deficient under the heightened pleading standards of the PSLRA and Rule 9(b).
Dentsply Sirona Inc. manufactures and distributes dental supplies on a worldwide basis. The Company’s products include dental prosthetics, endodontic instruments, dental sealants, ultrasonic scalers, dental x-ray equipment, and intraoral cameras. Dentsply also provides impression materials, orthodontic appliances, and dental operatory software systems and other dental products.
The Skadden Wilmington-based team which advised Dentsply Sirona included Paul Lockwood (Picture), Jenness Parker, and Veronica Bartholomew.
Law Firms: Skadden Arps Slate Meager & Flom;
Clients: Dentsply Sirona;