LOS ANGELES, October 25, 2022 – Leading international law firm Proskauer announced today that it secured a significant victory for Shamrock Capital Advisors, in a high-profile case brought by founders and other minority shareholders of bookmaker and fantasy sports provider, FanDuel, a portfolio company of Shamrock. FanDuel’s founders and other minority shareholders alleged breach of fiduciary duty, aiding and abetting and unjust enrichment claims against Shamrock, a preferred shareholder in FanDuel, and other defendants.
In a $1 billion lawsuit, the founders and early employees of FanDuel claimed that certain directors undervalued the company during its merger with European sportsbook Paddy Power Betfair (PPB).
Proskauer secured dismissal of the claims against Shamrock for breach of fiduciary duty and unjust enrichment at the trial court level. The Appellate Division, First Department court in Manhattan dismissed the remaining claim of aiding and abetting and all other claims against the other defendants, ruling that contrary to the trial court’s finding, Scottish law applied in the case and New York law did not apply to FanDuel, which was incorporated in Scotland. Under Scottish law, directors owe a fiduciary duty to their companies rather than shareholders and the appellate court held that under even the most liberal interpretation of the facts alleged there was no breach of fiduciary duty by any FanDuel director.
The appellate court also ruled that the corporate internal affairs doctrine applied to all defendant directors who were at FanDuel at the time of the merger.
The Proskauer team was led by Litigation partners Jonathan Weiss, Mike Hackett, Tim Mungovan and Bart Williams and associates Christina Assi, Will Dalsen, Adam Deming and Hena Vora.
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