Professional Shareholder Representation Services Success Stories

00:00:05
My name is Ana Samarjian. I'm a senior director with the Shareholder Representation Team here at SRS Aquiom. Prior to starting at SRS Aquiom, I worked at a large international law firm where I handled high-value disputes.

Having this background and experience helps me act as a stable guiding hand for our clients who are often facing litigation or disputes for the first time. I was working on a case with a set of shareholders who were facing one of the scariest situations shareholders can face.

00:00:33
They were being sued by the buyer for breaching the purchase agreement, and a group of them were also being sued for fraud, where the buyer was demanding the entire multimillion-dollar escrow account and to take back some of the purchase price. SRS Acquiom was brought in to act as the shareholder representative for the selling shareholders in this dispute. The shareholders needed the guidance and expertise of SRS Acquiom because lawyers in our group have more experience working on these scenarios than anyone else.

We had selling shareholders from all over the world, including Europe, Asia, and the U.S., none of whom were based in the U.K., and we had a conflict of interest brewing among a set of the shareholders.

00:01:13
What made this even more interesting is that we were facing a litigation in London courts under English law. The shareholders were nervous facing this litigation because none of them had been sued before, and they were relieved when SRS Acquiom came in with the ability to handle the litigation, hold their hands through the process, and navigate the complexities of dealing with an English law based dispute in a foreign jurisdiction.

00:01:36
Our team of lawyers here at SRS Acquiom handle more post-closing disputes with buyers than anyone else, and our litigation expertise allows us to guide our clients in understanding the steps of the process, how long it will take, the possible on and off ramps for litigation, the possibility of settlement and creative problem solving, to get on the same page with each other, and to convince the buyer to get on the same page with us.

00:02:01
The parties got together on the morning of the mediation, and we were there until late into the night working on trying to find a middle ground and a resolution that could end the litigation.

Getting to yes, in this situation required a deep understanding of the litigation process, knowing what the priorities were of our clients, the shareholders, and the buyer, and being able to negotiate across cultures, languages, time zones, in an effort to try to get us all on the same page. After 14 hours of negotiating, we were able to reach a settlement. The settlement allowed us to end the litigation, dismiss the lawsuit against the shareholders, and allowed the shareholders to reclaim the vast majority of the multi-million dollar escrow account.

00:02:44
We scheduled this mediation one year into the litigation and were able to resolve it right there. If it weren't for this, this lawsuit could have gone on for years. Tying up the shareholders' money and time, getting all the shareholders on the same page when they had different interests would've been nearly impossible if not for the experience of SRS Acquiom.
 

00:00:00
SRS Acquiom was able to take a $100,000 positive adjustment and turn it into a $2,000,000 result for the sellers without any outside expense.

My name is Casey McTigue. I went to law school at UC Berkeley. It was private-practice litigator for several years and I joined SRS Acquiom in 2013. Since then, I personally worked on several 100 litigations and earnout disputes with the company, and I now am the Managing Director of the Shareholder Representation product. SRS Acquiom handles a bunch of different parts of post-closing merger transactions.

00:00:31

One thing that people hire us for is working capital adjustments and PPAs as we like to call them. We do several hundred of these a year, this particular transaction, billion-dollar deal, no indemnification escrow. So, no claims coming in that we expect. It will really just engage your working capital adjustment. On a billion-dollar deal, sometimes the adjustments are very, very large. This time the adjustment came in at $100,000 in favor of the sellers, which in this compared to the size of the deal, was very small. It turned out that.

00:01:00

As in many cases, the sellers are fine with just accepting that number, but we always like to do a deeper dive just to make sure first thing that we do when we get an adjustment, one of our CPA's or Chartered Accountants from the UK, will take a look and kind of kick the tires and it just takes 30 minutes in most cases and what they found here were a few red flags. They can then send that adjustment to the investors and make a recommendation whether we should investigate further or not. And here we did recommend that we investigate further. And when we did investigate it further, we found a couple key issues.

00:01:33

So those red flags turned out to be real red flags. So here we were able to quickly identify $3 million that we should be getting. There's a clear dispute mechanism in the agreement that we could go after them for, but the parties in the end come together and to avoid all that and avoid expensive any outside parties, settle for $2,000,000.

00:01:50

Quickly get that out to the seller group without any outside expense incurred. In the end, everybody left happy. I think the buyer was happy that the issue was resolved correctly. The seller group was very happy that no outside expense was incurred, and we maintained as always, our solid working relationship with all parties, buyers, sellers, and the Seller Counsel.

Problem Solved: Seven-Figure Sexual Harassment Claim

Speaker 1 (00:04):
My name is Michelle Kirkpatrick. I'm an attorney at SRS Acquiom. I went to Berkeley for law school. After I graduated, I started a two-year federal clerkship. During the clerkship, I handled over a hundred different mediations, but also handled a lot of litigation as well. I left the clerkship. I started at the world's largest labor unemployment law firm, where I handled mostly litigation, but also some advice and counsel and I left that firm and came to SRS Acquiom. I was in Delaware. I was leaving mediation and I got a call from one of the folks on our team. Right before closing, there had been an allegation against the CEO of the target company of sexual harassment. They were very worried, obviously an allegation of this magnitude is concerning. They were feeling defensive, they were feeling nervous. They were feeling upset.

Speaker 1 (00:54):
So I got right on the phone with the client and I started talking with them. We started developing a strategy immediately. They had not set aside very much money in their expense fund, so I knew we could not rely heavily on outside counsel for this. I knew this was something that I needed to manage very closely myself. We did partner with some experts, and move the matter into a confidential mediation but going into that mediation, our outside counsel actually got a phone call. There had been a family emergency, she needed to leave. So this, you know, under normal circumstances probably would've stopped the mediation. If I had not been there, there wouldn't have been an attorney in the room able to handle this, but thankfully I was there. I was able to step in and help the accuser.

Speaker 1 (01:40):
They wanted a million dollars. But on the other side of it, you know, our clients were sitting there believing that they had done nothing wrong, but I knew from my vantage point that for the shareholders, we couldn't let that emotion carry the day. I knew that we had to step in and reach a resolution that was going to benefit all of the shareholders. I was able to talk with my clients and convince them based on my experience that litigation was not going to be the most productive path. I knew that if we went down that road, we would need to raise money, which they weren't interested in doing and I knew that if we allowed their emotions to dictate the experience, we were going to have real problems. I was also able to navigate the mediator and the other side and, and get them down to a resolution, below six figures.

Speaker 1 (02:33):
So a tenth of the original demand, the great news is that we settled it that day. There were no other claims in the deal and we were able to release the escrow right on schedule without having to spend almost any money and without any further issue. They had just bought this company, they didn't want this liability. They didn't want litigation. And they didn't want to have to handle it. So they were very, very pleased when I got to call them later that day and say, this is taken care of, the problem solved.