Opinion ID: 2394569
Heading Depth: 1
Heading Rank: 4

Heading: The ASLC Action

Text: On November 21, 2005, Apprival Shareholder Litigation Company, LLC (ASLC) commenced the ASLC Action on behalf of certain shareholders, including van der Burg, who had purportedly assigned to ASLC their rights to act independently in bringing claims under the Agreement. [4] Like Lesh, ASLC alleged that ev3 purportedly breached the Agreement's Milestone provisions and that Appriva's acceptance of the merger had been procured through misrepresentations. On January 31, 2006, ev3 moved to dismiss ASLC's claims pursuant to Rule 12(b)(6). Besides arguing that ASLC's allegations of breach of contract and misrepresentations were deficient, ev3 asserted that the plain and unambiguous terms of the Agreement and the SRA precluded ASLC's standing: (i) as the assignee of its members' rights to act independently in bringing claims under the Agreement, because such rights had been irrevocably and exclusively delegated to the Shareholder Representatives and, therefore, could not have been assigned to ASLC; (ii) as the assignee of van der Burg's right to bring claims under the Agreement as a Shareholder Representative, because ASLC had not acted jointly and together with Lesh in commencing the ASLC Action; and/or (iii) because ev3 had not consented to the purported assignment to ASLC of the rights of its members  van der Burg and the three institutional Shareholders  to bring claims under the Agreement. In an opinion dated August 24, 2006, a different Superior Court judge converted the Rule 12(b)(6) motion to dismiss into a Rule 56 motion for summary judgment and dismissed the ASLC Action. [5] The Superior Court held that ASLC has not demonstrated it has standing to bring this action. Like the decisions dismissing Lesh's complaint and denying Lesh's motion for reargument, the ASLC decision was based on the terms of the Merger Agreement and the SRA. The second Superior Court judge held that, [o]n the Merger Agreement alone, ASLC has not met its burden to show its standing. First, the agreement appoints Lesh and van der Burg as Shareholders' Agent. Second it requires them to act in concert. ASLC's complaint manifestly shows they have not and it makes no pretense that they have done so. Quoting Section 1.1(a)-(c) of the SRA in its entirety, the Superior Court concluded, [t]he Shareholders Agreement contains provisions which also but independently, undercut ASLC's claims of standing.