After a two-week trial, the jury awarded plaintiffs only a fraction of the damages calculated by the plaintiffs’ expert.
Retained by O’Melveny & Myers
ArcSoft, a privately-held U.S. based software company, was bought out by a group of investors (that included ArcSoft’s CEO) in 2017. In 2019, ArcSoft went public through an IPO in China, and ArcSoft’s valuation at that time was significantly higher than its valuation at the time of the buyout.
The plaintiffs, a group of ArcSoft investors who sold their shares in the 2017 buyout, alleged that ArcSoft and its CEO persuaded them to sell their shares in the buyout at a price far below fair market value by making misleading statements that ArcSoft was in financial decline. Plaintiffs alleged that if they had known the truth, they would not have accepted the share price that was offered in the 2017 buyout.
Counsel retained Cornerstone Research to support Rick Van Zijl and Reza Dibadj of the University of San Francisco, both of whom testified at trial.
- Van Zijl rebutted plaintiffs’ experts’ opinions regarding the growth profile of ArcSoft at the time of the buyout as well as their valuation analyses, including discounted cash flow (DCF), comparables and previous transactions.
- Professor Dibadj rebutted plaintiffs’ experts’ opinions regarding the corporate governance processes surrounding the buyout of ArcSoft’s shares in 2017, and the defendants’ purported duty to disclose certain information to shareholders during the buyout.
After a two-week jury trial in the U.S. District Court, for the Northern District of California, the jury slashed Plaintiffs’ requested damages by over 95%.
