According to the complaint filed on September 16, 2010, this action arises out of defendants' violations of state law and § 14(a) and §20(a) of the Securities Exchange Act of 1934 (the "1934 Act") and U.S. Securities and Exchange Commission ("SEC") Rule l4a-9 promulgated thereunder in connection with their attempts to sell Dynegy via an unfair process to Blackstone for $4.50 per share (the "Proposed Acquisition").
In pursuing the unlawful plan to solicit shareholder approval oftheir proposed sale of Dynegy, each ofthe defendants violated applicable law by directly breaching and/or aiding other defendants' breaches oftheir fiduciary duties ofloyalty, due care, good faith and fair dealing. This action seeks to enjoin the Individual Defendants, as defined herein, from further breaching their fiduciary duties in their pursuit of a sale of the Company to Blackstone at an unfair price and following an unfair and self-serving process.
On January 18, 2011, the Court issued two orders dismissing four of the defendants from this action without prejudice.
On January 24, 2011, the Court issued an order to have the cases managed under the docket number 10-CV-3145.
According to the Company's Form 10-Q for the quarterly period ended June 30, 2011, in connection with the merger agreement with an affiliate of The Blackstone Group L.P. (as amended, the “Blackstone Merger Agreement”) and the merger agreement with an affiliate of Icahn Enterprises L.P. (as amended, the “Icahn Merger Agreement” and, together with the Blackstone Merger Agreement, the “Merger Agreements”), numerous stockholder lawsuits were filed in the District Courts of Harris County, Texas, the Southern District of Texas, and the Court of Chancery of the State of Delaware. The cases in these three jurisdictions were ultimately consolidated into one action in each jurisdiction (the “Consolidated Texas State Court Action,” the “Consolidated Texas Federal Action,” and the “Consolidated Delaware Chancery Court Action”). One stockholder derivative lawsuit was filed in a District Court in Harris County, Texas. On November 7, 2010, during the pendency of the Blackstone transaction, the parties entered into a memorandum of understanding providing for the full and final settlement of the Texas state stockholder class actions and the Delaware actions. The memorandum of understanding and settlement were expressly subject to and conditioned upon the consummation of the transactions contemplated by the Blackstone Merger Agreement. Accordingly, when the Blackstone Merger Agreement was terminated, the settlement became null and void. Thereafter, the motion by the plaintiff in the stockholder derivative action to nonsuit all defendants without prejudice was granted on December 14, 2010. Following the termination of the Icahn Merger Agreement and upon Dynegy’s insistence, the plaintiffs in the Consolidated Texas Federal Action and Consolidated Delaware Chancery Court Action moved to dismiss their claims without prejudice. The courts dismissed the cases on March 1, 2011, and March 16, 2011, respectively. On March 28, 2011, plaintiff’s counsel in the Consolidated Texas State Court Action filed a motion seeking attorneys’ fees and expenses. In July 2011, the Court granted the motion and awarded approximately $1.6 million in fees and expenses. Dynegy intends to appeal the decision.