The three members in a board of Oracle Corporation (NYSE:ORCL) gave an excellent recommendation to Plaintiff’s attorneys to move forward with breach of duty claims in August 2019 against colleagues. Now, investors accuse Safra Catz, Chief Executive Officer, and Larry Ellison, Oracle Chair, and those three members on the board that they cover-up critical discovery.
In 2018, in response to the suit filed by the pension funds, Oracle constituted a three-member litigation committee to probe the breach of duty claims amounting to billions of dollars. The pension funds alleged in its lawsuit filed in 2017 that the directors of Oracle have approved the takeover of Ellison controlled NetSuite for $9.3 billion, which is much higher when compared to its prevailing market price.
The special litigation committee fails to pacify
To settle the dispute, the litigation committee collected several vital documents and conducted interviews along with an independent financial advisor. After the failure of settlement talks, the committee advised Oracle to entrust the responsibility of representing its investors to the plaintiff’s attorneys to move forward with probing the allegations against those board members. The plaintiff’s lawyers would also investigate Ellison in the billion-dollar cover-up.
It is bizarre that one of the board members – Leon Panetta, who approved the NetSuite deal, is in the special litigation committee. Leon would face liability in a lawsuit filed by the investors.
Directors tried to dismiss the allegations
The directors of Oracle attempted to deny the claims of shareholders in a cover-up attempt. Deborah Hellinger, a spokeswoman of Oracle, said there is no merit in the breach of accusations leveled by the investors, though the committee is allowing the lawyers of shareholders to proceed with the case.
The lawyers from Robbins Arroyo, Robbins Geller Rudman, and Friedlander & Gorris could have a big head start in the case. Now, the same lawyers said the special committee bowed to the pressure of Catz and Ellison to cover up the case. They have requested Sam Glasscock, Delaware Vice-Chancellor, to force the steering committee of Oracle to comply with the subpoenas. According to the lawyer’s request, Glasscock should thwart efforts of Catz, and Ellison to prevent the subpoenas.
The directors of Oracle promised to provide all the necessary documents to help the investigation.
Compensation of Catz, Mark Hud, and Ellison drops
The payment of Catz, Mark Hud, and Ellison have fallen by 98% in 2019. However, they have received substantial amounts from earlier grants.
