Grant & Eisenhofer, Bernstein Litowitz and Kessler Topaz Represent Xerox Investors in Securing Precedent-Setting Injunction Against Sale to Fujifilm and Settlement Providing for Xerox Board Resignations

NEW YORK, May 2, 2018 /PRNewswire/ -- Shareholders of Xerox Corp. scored an important victory this past Friday when New York State Supreme Court Judge Barry Ostrager temporarily blocked the company from proceeding with its proposed sale of a majority stake to Fujifilm Holdings.  Xerox shareholders alleged that Fuji leveraged the desire of Xerox CEO Jeff Jacobson to keep his job after the board had threatened to fire him to obtain a sweetheart deal for itself and at Xerox investors' expense.

In the wake of the ruling, Xerox's Board entered into settlements, subject to court approval, with all suing shareholders, including institutional investors and Darwin Deason, Xerox's third largest shareholder, providing, among other things, that the majority of its board of directors will resign and facilitate the appointment of a new slate of directors.  

At the same time, Mr. Jacobson agreed to resign from his job as Xerox CEO. The new board is expected to meet immediately to evaluate all strategic alternatives for the company, which may include renegotiating the Fuji deal or selling Xerox to third parties, with the sole objective of maximizing value for all shareholders.  Importantly, the settlement with the Xerox board does not resolve pending claims against Fuji for aiding and abetting the board's breaches. 

Shareholders brought suit following Xerox's announced agreement in January by which Fuji would acquire control of Xerox.  Leading shareholder law firms Grant & Eisenhofer, Bernstein Litowitz Berger & Grossmann, and Kessler, Topaz, Meltzer & Check are co-lead counsel for a class of Xerox shareholders, and the firms' respective clients leading the case are the Carpenters Pension Fund of Illinois; the Asbestos Workers Philadelphia Pension Fund, and the Iron Workers District Council of Philadelphia & Vicinity Benefit & Pension Plan.  

In prosecuting the action on behalf of Xerox's public shareholders, the institutional plaintiffs coordinated and worked closely with Xerox's third largest shareholder – Darwin Deason – who filed individual claims as part of a broader proxy fight to challenge the board and the transaction. Mr. Deason is represented by King & Spalding.

In his decision of April 27, Justice Ostrager sided with shareholders in ruling that the Xerox board's proposed deal to sell a majority interest to Fujifilm resulted from a deeply flawed process.  Justice Ostrager noted that Fuji was contributing no cash for acquiring control of Xerox and that the proposed deal failed to pay Xerox shareholders a premium for selling control of the company.  The Judge wrote: "This transaction was largely negotiated by a massively conflicted CEO in breach of his fiduciary duties to further his self-interest and approved by a Board, more than half of whom were perpetuating themselves in office for five years without properly supervising Xerox's conflicted CEO."

Justice Ostrager continued: "Once Jacobson learned that he had been targeted for replacement by Xerox's largest shareholder and eventually the Board itself, he abandoned the Board's request to obtain a value-maximizing all-cash transaction and engineered the framework for a one-sided deal that includes Jacobson retaining his position as CEO post-transaction."

"Justice Ostrager's decision to halt the transaction recognizes that courts can and will intervene to protect shareholders where company management puts its own interests ahead of the interests of the shareholders," said James Sabella, a director at Grant & Eisenhofer.

"The impact of Justice Ostrager's ruling has been immediately validated by today's announcement that a majority of Xerox's board, including its CEO, is stepping down and a new board majority with a clear mandate to pursue an unconflicted search for value maximizing alternatives is stepping in," added Mark Lebovitch, a partner with Bernstein Litowitz.

Kessler Topaz partner Justin Reliford said: "It's gratifying to see the installation of a new independent board, who will seek a better outcome for all Xerox shareholders. This is an enormous win for investors."

The case is captioned: In re Xerox Corp., Consolidated Shareholder Litigation; Index Number: 650766/18.

About Grant & Eisenhofer P.A.
Grant & Eisenhofer is one of the nation's leading litigation firms, with a highly successful track record representing plaintiffs in complex litigation and arbitration matters. The firm has offices in Wilmington, New York, and Chicago, and an international docket of high-profile cases. G&E's clients include institutional investors, whistleblowers and other stakeholders in securities class actions, derivative lawsuits, consumer class actions, antitrust suits, bankruptcy litigation and whistleblower cases involving the False Claims Act. The firm has recovered more than $28 billion in the last 10 years and has twice been cited by RiskMetrics for securing the highest average investor recovery in securities class actions. G&E has been named one of the country's top plaintiffs' law firms by The National Law Journal for more than a decade and was named one of the nation's "Most Feared Plaintiffs Firms" by Law360.  For more information, visit www.gelaw.com.

About Bernstein Litowitz
The top-ranked securities litigation firm in the U.S. (ISS Securities Class Action Services), BLB&G has obtained over $31 billion on behalf of investors. Working with its institutional investor clients, the firm has achieved precedent-setting corporate governance reforms which have increased market transparency, held wrongdoers accountable and improved corporate business practices in groundbreaking ways.  BLB&G is routinely recognized by industry observers for its legal excellence and achievements: Four-time national "Plaintiff Firm of the Year" and "the plaintiff securities shop everyone else aspires to be like…" - Benchmark Litigation; One of the nation's "Most Feared Plaintiffs Firms" - Law360; "Consistently achieving the highest returns for investors" - The National Law Journal; "The best advice in the field" - Chambers USA; "Battle proven…" – The Wall Street Journal. For more visit: www.blbglaw.com.

About Kessler Topaz
Kessler Topaz is one of the world's leading advocates for institutional investors from around the world. The firm has recovered billions of dollars for clients resulting from securities class actions, shareholder derivative suits, antitrust litigation and other complex litigation in jurisdictions around the globe. For more, visit www.ktmc.com.

Contact:  Elise Martin 302-622-7004 [email protected]

SOURCE Grant & Eisenhofer P.A.

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