Rob Weiser, a founding member and managing partner of the firm, has been admitted to practice before countless district and appellate courts across the county. Mr. Weiser’s practice is focused on shareholder derivative, federal securities and whistleblower litigation. Mr. Weiser is currently directing the prosecution of several high profile cases, including cases against the boards of directors of Microsoft Corporation, Sprint Nextel Corporation, ITT Educational Services Inc. and Intuitive Surgical. He is also currently leading the investigation of certain Fortune 500 companies regarding various whistleblower claims.
Mr. Weiser has been involved in some of the most successful shareholder derivative actions in the history of corporate litigation. Specifically, Mr. Weiser was among the nationwide-leaders in prosecuting “option backdating cases” on a derivative basis. In addition to being among the attorneys that developed the central pleading theory in the backdating cases (which, in turn, produced some of the ground-breaking decisions in this area of law), Mr. Weiser successfully prosecuted backdating cases, which caused the subject corporations to cumulatively receive tens of millions of dollars in benefits. Subsequently, Mr. Weiser launched a wave of actions that challenged the executive compensation awarded at the nation’s largest banks, which received federal “bailout” funds. A sampling of the notable cases in which Mr. Weiser has served as lead or co-lead cousel includes:
- In re Oracle Corp. Derivative Litig., 824 A.2d 917(Del. Ch. 2003).
Mr. Weiser was co-lead counsel in the Oracle action. In that case, plaintiffs challenged certain multi-million dollar stock sales made by Oracle’s senior officers, including Larry Ellison, Oracle’s founder.
Oracle’s board of directors appointed a “special litigation committee” to investigate plaintiffs’ claims and, after a lengthy investigation, the committee moved to dismiss the case, having concluded that plaintiffs’ claims lacked merit. Among other things, plaintiffs’ challenged the independence of the committee members, their good faith, and their ultimate conclusion. The Delaware Court of Chancery denied the committee’s motion, which allowed the action to proceed to trial. At the time it was issued, the Oracle decision was one of only four reported Delaware Chancery Court cases where a special litigation committee’s motion to dismiss was denied by a Delaware chancellor and many commentators view the Oracle case as a landmark decision for shareholders. For example, the Wall Street Journal called the seminal decision “one of the most far-reaching ever on corporate governance.” This case eventually settled for $100 million on the eve of trial. Mr. Weiser believes that the $100 million recovery was the second largest derivative settlement in history. The Oracle case, and its impact on corporate governance matters nationwide, is the subject of numerous scholarly articles and treatises.
- In re Affiliated Computer Servs. Derivative Litig. No. 3:06-cv-1110, (N.D.Tex. 2009). In this
option backdating action, plaintiffs challenged the stock option grants received by ACS’ officers & directors over a multi-year period. Plaintiffs in a related action purported to settle these claims for approximately $1.8 million, an amount, which Mr. Weiser and his co-counsel believed was far less than they were worth. After objecting to the settlement of the related action, and engaging in a contentious discovery battle, Mr. Weiser and his co-counsel were able to materially enhance the settlement by securing a $30 million recovery for ACS. This is the largest recovery in a derivative action litigated in Texas.
- In re KB Home Derivative Litig., Master File No. BC355179 (Cal. Super. Ct., Los Angeles Cnty.). Mr. Weiser was co-lead counsel in this action. In this option backdating action, plaintiffs challenged the stock option grants received by KB Home’s officers & directors over a multi-year period. In addition to obtaining valuable corporate governance enhancements for KB, Mr. Weiser and his co-lead counsel settled this action for benefits worth at least $30 million to KB, making it one of the largest settlements in the history of California corporate litigation.
- Gebhardt v. Allumbaugh, et al., Case No. 2002-13602 (Harris Cnty. Texas Dist. Ct. 2006) (the “El Paso Derivative Litigation”). Mr. Weiser was lead counsel in the El Paso Derivative Litigation. This action centered on the the El Paso corps alleged anti-competitive conduct in California during that the state’s energy crisis of 2001-02. In addition to making sweeping changes to the Board’s structure and the Company’s corporate governance practices, Mr. Weiser was able to secure a $16.75 million recovery for the Company. The El Paso
Derivative Litigation was one of the largest derivative settlements in Texas history at the time it was agreed to.
- Klotz v. Parfet, et al., Case No. 03-06483-CK (Mich. Cir. Ct., Jackson Cnty.) (the “CMS Derivative Litigation”)Mr. Weiser was co-lead counsel in the CMS Derivative Litigation. In that case, plaintiff alleged that CMS’ Board of Directors failed to develop and implement adequate corporate governance practices and internal controls. Plaintiff alleged that the Board’s internal control failures caused the Company to suffer enormous damages to its reputation and prestige. In settling the CMS Derivative Litigation, the Firm was able to recover $12 million for the Company, and the Board agreed to adopt what one commentator called “some of the most substantial corporate governance reforms” ever undertaken by a publicly traded corporation. Mr. Weiser believes that the CMS derivative settlement is the largest in the history of Michigan corporate litigation.
- Huscher v. Curley, et. al., No. 00 Civ. 21379 (Mich. Cir. Ct., 2000) (the “Sotheby’s Derivative Litigation”).
In the Sotheby’s Derivative Litigation, plaintiffs alleged that the Company’s Chief Executive Officer had entered into illegal price-fixing agreements with the Company’s leading purported competitor, Christie’s International PLC. As a result of the settlement of this case, the Company received the return of certain monetary benefits, which had been provided to the Chief Executive Officer (“CEO”) that were worth approximately $12 million to the Company. In addition, significant changes in the Company’s top management and Board of Directors were achieved in conjunction with the settlement of the case.
- Barry v. Cotsakos, CV 49084 (Cal. Super. Ct., San Mateo Cnty.) (the “E*Trade Derivative
Litigation”). Mr. Weiser was co-lead counsel in the E*Trade Derivative Litigation, which is one of the most successful executive compensation cases ever brought against a publicly traded corporation’s board of directors. In that case, the plaintiff challenged the payment of excessive compensation awarded to E*Trade’s then-current CEO. As a result of the settlement of the case, E*Trade’s CEO returned approximately $25 million to the Company, and he also agreed to forego other valuable financial benefits. The E*Trade settlement also provided for sweeping changes to the company’s corporate governance practices and the structure of its Board. These measures, and the resulting change in the public’s perception of E*Trade, were profiled in a September 8, 2003 Wall Street Journal article entitled “How One Firm Uses Strict Governance To Fix Its Troubles.” Since the time of the E*Trade settlement, E*Trade added independent directors to its Board, who have since forced out the Company’s CEO. In response to these changes, the Company’s stock increased more than 300% in the 18 months following the settlement and the “new” E*Trade was the subject of several positive media reports.
- In re Staples, Inc. S‘holders Litig., 792 A.2d 934 (Del. Ch. June 5, 2001). Mr. Weiser was the lead counsel in the Staples action. In that case, plaintiffs secured a financial benefit worth at least $12 million to Staples by winning an injunction preventing Staples from holding a shareholder vote on an improperly disclosed recapitalization plan that unfairly benefitted Staples’ insiders at the expense of the Company and its stockholders.
- Eliasoph v. Johnson, C.A. No. 05-CVS-3698 (N.C. Gen. Civ. Litig. Ct.) (the “SPX Derivative Litigation”). Mr. Weiser was lead counsel in the SPX Derivative Litigation. The SPX Derivative Litigation is the most successful executive compensation case ever brought against a publicly traded corporation’s board of directors. In this case, the plaintiff challenged the fairness of the Company’s entire executive compensation structure. In connection with the settlement of the SPX action, the Company’s board of directors agreed to adopt a new executive compensation plan which, was designed, in part, with plaintiff’s counsel and her expert. The new compensation plan more closely aligned shareholder and management interests and it was estimated that the new plan would save the Company at least $25 million.
- David, et al., v. Wolfen, et al., Lead Case No. 01-CC-03930 (Cal. Super. Ct., Orange Cnty.) (the “Broadcom Derivative Action”).Mr. Weiser was co-lead counsel in the Broadcom Derivative Action. Like the Oracle case, the Broadcom Derivative Action also produced a ground-breaking settlement. In connection with the eventual settlement of the Broadcom Derivative Action, plaintiffs were able to compel Broadcom to make sweeping, substantial changes to its corporate governance practices which included a provision which allows
Broadcom’s shareholders to nominate directors to Broadcom’s Board. In particular, the shareholder-nominated director provision was thought to be a highly significant and unusual achievement for Broadcom’s shareholders. As the Associated Press reported in commenting on the settlement: “[in contrast to the Broadcom settlement] the Securities and Exchange Commission has met fierce resistance to a proposal just to allow shareholder nominations under very limited circumstances.” This type of corporate governance relief has only been achieved in a handful of shareholder derivative actions, and it became a model for corporate governance settlements that followed.
- Wanstrath v. Doctor R. Crants, et al., C.A. No. 99-1719-III (Tenn. Ch. Ct., 20th Jud. Dist. 1999) (the “Prison Realty Derivative Litigation”). In the Prison Realty Derivative Litigation, plaintiff challenged the transfer of assets from Prison Realty to a private entity owned and controlled by several of the Company’s top executives. Plaintiffs also alleged that the proposed transaction would have crippled the Company’s liquidity. Plaintiffs were able to halt the planned transaction, which prevented the Company from suffering a $120 million loss, which was a highly significant victory in light of the Company’s then-precarious financial position. As a result of the settlement of the case, the members of the Company’s top management were removed, the composition of the Board of Directors was significantly altered and important corporate governance provisions were also put in place to prevent future abuse. Notably, all of these corporate benefits occurred at a time when the Company was facing near-certain bankruptcy, which would have wiped out shareholders’ equity in the Company. Because the Company had adopted these significant changes, it was able to renegotiate the terms of its credit facility with its lenders and it never had to file for bankruptcy protection. Since the time the case was settled, the Company’s new management has led the Company, now-named Corrections Corporation of America, to profitability, and the price of the common stock increased more than 400% in the two years following the settlement.