According to the complaint filed on September 10, 2010, the action arises out the defendants' violations of federal and state law in pursuing the proposed sale of ExpressJet to SkyWest for $6.75 per share in cash. The Proposed Acquisition was the culmination of a flawed process. Once the Board of Directors ("Board") found its preferred acquirer for the Company, it refused to look for any other potential suitors. In order to ensure that the Proposed Acquisition was completed by their favored purchaser, the defendants agreed to preclusive deal protection devices. In pursuing their unlawful plan to squeeze out ExpressJet's public shareholders, the
Individual Defendants, who are directors and officers of ExpressJet, have breached their fiduciary duties of loyalty and care.
According to the Company's Form 10K for the quarterly period ended September 30, 2010, between August 5, 2010 and August 25, 2010, nine substantially similar putative shareholder class action suits (collectively, the "Texas State Actions") were filed by individual ExpressJet stockholders in the District Court of Harris County, Texas against ExpressJet and its directors. Many of the petitions also name SkyWest, Inc. and Atlantic Southeast and/or merger sub (together, the "Additional Defendants") as defendants in the litigation. [...]. On September 10, 2010, a putative stockholder class action (the "Texas Federal Action" and, together with the Consolidated Texas State Action, the "Actions") was commenced in the United States District Court for the Southern District of Texas, Houston Division. The complaint filed in the Texas Federal Action includes substantially identical allegations to and requests substantially the same relief as the petitions in the Texas State Actions but also includes allegations related to the ExpressJet preliminary proxy statement filed with the SEC on September 3, 2010. [...]. Subsequent to September 30, 2010, counsel for the defendants in the Actions, Class Counsel and counsel for plaintiff in the Texas Federal Action agreed to and executed a memorandum of understanding (the "MOU") containing the terms of an agreement in principle to resolve the Actions. [...]. The MOU further provides that, in the event the Consolidated Texas State Action is dismissed in accordance with the settlement stipulation, the parties to the MOU will use their best efforts to obtain the dismissal with prejudice of the Texas Federal Action. The settlement of the Consolidated Texas State Action is subject to numerous conditions set forth in the MOU and to be contained in any stipulation of settlement, including the completion of the merger.
On March 11, 2011, the District Judge of the Texas Houston Division has stayed the case pending approval of a settlement in a parallel state court class action. This case is administratively closed pending the resolution of the pending related state court action.
On April 15, 2011, the Plaintiff voluntarily dismissed the case with prejudice pursuant to Federal Rules of Civil Procedure 41(a)(1)(A)(i) and 41(a)(1)(B).