Instead, a five-justice panel ruled, the doctrine applied to all defendant directors who were at FanDuel when events transpired that gave rise to the lawsuit.
The decision from the panel was framed on Thursday by counsel to FanDuel and its board of directors as a powerful victory. In all, there were more than 15 defendants named in the lawsuit, including two private equity firms in addition to FanDuel and its directors. The more than 130 plaintiffs in the lawsuit had claimed in court arguments, according to defense counsel, and in an amended complaint that total damages could exceed $1 billion, or multiples more of that.
“This is a sweeping victory for our client which confirms that the transaction was fundamentally fair and the proceeds [from the 2018 merger] were appropriately distributed,” said Mark Kirsch, a partner at King & Spalding in Manhattan who represents FanDuel and its board of directors. Matthew Biben, a fellow King & Spalding partner who has been FanDuel’s longtime counsel, also helped to lead FanDuel’s representation.
It appears that the plaintiffs, who have been fiercely litigating the suit since February 2020, may seek leave to appeal the First Department court’s decision to New York state’s highest court, the Court of Appeals, or find another route for challenging Thursday’s ruling.