Tuesday, August 15, 2006

Flash Gordon, err, Flash Memory

According to press reports, two class action lawsuits have been filed in the Santa Clara County Superior Court by shareholders of msystems Ltd. (NASDAQ: FLSH), challenging the proposed acquisition of msystems by SanDisk Corporation (NASDAQ: SNDK).

According to a 10-Q filed by SanDisk this week, the complaints:
allege breaches of fiduciary duties by officers and directors of msystems relating to alleged option backdating and to allegedly furthering their own interests in connection with the merger, and that these alleged breaches were aided and abetted by the Company. The complaints further allege that the terms of the announced merger between the Company and msystems are not fair to msystems' shareholders.
So, Kevin LaCroix at The D&O Diary has a new case to add to his burgeoning list of options-backdating related litigation, perhaps even a whole new subcategory - "Merger-Related Options Backdating Derivative Litigation."

A review of the dockets reveals that plaintiffs' counsel include Lerach Coughlin Stoia Geller Rudman & Robbins LLP and Robbins Umeda & Fink, LLP.

Daily Trivia: msystems created the first of the now ubiquitous USB flash drives, also known as "thumb drives".

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