On the heels of advising Beam Inc. regarding its agreement to be acquired by Suntory Holdings Limited in one of the largest Japanese buyouts of an American corporation, Sidley represented the company in litigation arising out of that buyout for an unusually favorable resolution through a novel application of the law.
Litigation was filed in both the Delaware and Illinois state courts shortly after the merger agreement was announced. After Suntory’s initial merger overture to Beam, Beam’s board of directors adopted a forum selection bylaw, pursuant to which any litigation involving the internal affairs of the corporation was required to be brought in Delaware, where Beam is incorporated.
“There had been a very important decision in Delaware court several months earlier that said forum selection bylaws were enforceable,” said Walter Carlson, a Practice Area Team Co-leader of the firm’s Securities and Shareholder Litigation practice. “But that was in Delaware court. The question remained whether courts in other states would follow this decision,” Carlson added.
By applying this legal theory, Carlson and his team were victorious on behalf of Beam in Illinois state court.“We received a very thoughtful ruling from the trial court judge here in Illinois who said she was going to enforce the bylaw as a matter of Delaware law and would require that any litigation go forward in Delaware,” said Carlson. The Illinois cases were dismissed, which was the result Carlson and his team sought. They were then able to settle quickly with the Delaware plaintiffs.
“We really were on the forefront of Delaware law in terms of obtaining dismissal on these particular grounds,” said Umar, a member of the firm’s Securities and Shareholder Litigation practice.
For their work on behalf of Beam, Sidley earned first prize in the category “Global M&A Deal of the Year, Japan (Outbound)” in American Lawyer’s second annual Global Legal Awards. A team of Sidley lawyers spanning North America, Europe and Asia advised on the transaction, valued at $16 billion. Those who led the merger included Chicago corporate partners Tom Cole and Beth Flaming and corporate senior counsel Fred Lowinger. Lawyers across the firm’s antitrust, environmental, employee benefits, finance, litigation, SEC, tax and Japanese law practices also provided significant advice.