Judge sides with Ellison in Oracle shareholder suit over NetSuite acquisition
A Delaware judge has ruled in favor of Oracle founder Larry Ellison in a shareholder lawsuit alleging that he coerced the company into paying a grossly inflated price to acquire software corporation NetSuite
DOVER, Del. (AP) — A Delaware judge has ruled in favor of Oracle founder Larry Ellison in a shareholder lawsuit alleging that he coerced the technology company’s board into paying a grossly inflated price to acquire software company NetSuite Corp. in 2016.
Vice Chancellor Samuel Glasscock III on Friday rejected the plaintiffs’ allegation that Oracle’s acquisition was not entitled to the deference traditionally shown corporate decision-makers under Delaware’s “business judgment” rule.
The shareholders argued that the $9.3 billion deal should be subjected to a more rigorous “entire fairness” review because Ellison was both a controlling shareholder of Oracle at the time and owned almost 40% of shares in NetSuite, which he cofounded in 1998. The lawsuit alleges that Oracle overpaid for NetSuite by $3 billion.
While noting that Ellison was “a force” at Oracle and a face of the company, Glasscock said Ellison was not a controlling shareholder and did not try to influence the board’s decision to acquire NetSuite. Ellison withdrew from Oracle’s consideration of the NetSuite acquisition just before the initial presentation to the Oracle board, and the remaining directors set up a special committee to conduct negotiations, the judge noted.
