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Zendesk merger class action lawsuit overview:
- Who: Brian Bailey and Scott Franklin filed a class action lawsuit against Zendesk Inc. and a group of its board of directors.
- Why: Bailey and Franklin claim Zendesk misled its shareholders into, against their best interest, approving its 2022 merger with Zoro Bidco and Zoro Merger Sub.
- Where: The class action lawsuit was filed in California federal court.
Zendesk misled shareholders when making statements intended to help the company get their approval of its 2022 merger with Zoro Bidco and Zoro Merger Sub, a new class action lawsuit alleges.
Plaintiffs Brian Bailey and Scott Franklin claim Zendesk’s board of directors, prior to the merger, issued a Definitive Proxy Statement with the U.S. Securities and Exchange Commission that they argue contained “materially false and misleading statements.”
Bailey and Franklin argue Zendesk’s board of directors knew that a merger consideration was “inadequate” and directed the company’s management to “downwardly revise” a long-range plan that had been presented for the company through 2025.
“Material statements identified from the Proxy falsely represented the reasonableness of the Fairness Opinion Projections to the Company’s shareholders, and misled Zendesk shareholders as to the fair value of their shares,” the Zendesk class action states.
Bailey and Franklin want to represent a nationwide class of Zendesk public stockholders.
Zendesk shareholders vote to approve merger based on ‘materially false and misleading Proxy,’ class action says
Zendesk shareholders in a special meeting held on Sept. 19, 2022 — voted to approve the merger agreement “based upon the materially false and misleading Proxy,” the Zendesk class action alleges.
Bailey and Franklin argue that, once the merger was approved, shares of Zendesk were cashed out and delisted from the New York Stock Exchange, thereby “denying shareholders the ability to profit from the Company’s future growth.”
“Defendants’ conduct caused Company shareholders to lose out on alternative options that offered greater value, including independently growing the Company or seeking better offers from alternative bidders,” the Zendesk class action states.
Bailey and Franklin claim Zendesk and its board of directors violated the Securities and Exchange Act of 1934.
Plaintiffs are demanding a jury trial and requesting declaratory relief along with an award of compensatory, rescissory, and quasi appraisal damages for themselves and all class members.
In January, Zendesk informed Coinigy that it had suffered a data breach that it warned may have exposed some service data belonging to the crypto trading and portfolio management company.
Are you a public stockholder of Zendesk? Let us know in the comments!
The plaintiffs are represented by Juan E. Monteverde, Rossella Scarpa and David E. Bower of Monteverde & Associates PC, and Michael Palestina of Kahn Swick & Foti LLC.
The Zendesk merger class action lawsuit is Bailey, et al. v. Zendesk Inc., et al., Case No. 3:23-cv-01243, in the U.S. District Court for the Northern District of California.
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3 thoughts onZendesk class action claims company solicited approval of unfair merger with false, misleading statements
Sounds like business as usual in the United States of America. If they were truly ever sought after, characteristics like ethics, courage, honesty, discipline, principles, honor and decency are a suckers game now; especially after the 45th administration. Truly, a Buck is the only thing that has any value to any American
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