Alpha Natural Resources Successfully Opposes Preliminary Injunction Motion Against Merger with Massey Energy
May 31, 2011
Cleary Gottlieb won a victory for Alpha Natural Resources in the Delaware Court of Chancery, where on May 31, 2011, Vice Chancellor Strine denied the plaintiffs’ motion to enjoin the merger between Alpha and Massey Energy Company. The plaintiffs, who had previously brought derivative claims against certain Massey directors and officers, moved for a preliminary injunction after amending their complaint to assert claims for breach of fiduciary duty against Massey directors who had approved the merger. Contending that Alpha had not paid the full economic value of the derivative claims, plaintiffs sought to prevent the merger pending a trial on the derivative claims or in the alternative, for the court to create a “litigation trust” that, post closing of the merger, would hold the derivative claims for the benefit of the current Massey shareholders. In an 80 page opinion, the court denied the plaintiffs’ request in all respects. Alpha and Massey stockholders approved the merger transaction at special meetings today.