Some Claims Survive Summary Judgment in the Ebix Shareholder Litigation
By: Josh Gaul and Samira Torshizi
Only a handful of the claims survived summary judgment in the recent order issued by Vice Chancellor Joseph R. Slights III in In re Ebix, Inc. Stockholder Litig. This was the third major ruling in a five-year-old, repeatedly amended stockholder suit that involved stock incentives, a past acquisition bonus, and allegedly inadequate disclosures. Of the ten causes of action, the only ones to survive summary judgment were claims for breach of fiduciary duty to disclose material facts that alleged false or misleading disclosures that could have altered deliberations of a reasonable shareholder.
The surviving disputes, which are now headed to trial, concerns three documents that created executive compensation arrangements in 2009 and 2010: (1) an Acquisition Bonus Agreement (“ABA”) that Ebix, Inc. (“Ebix”) entered into with Chairman and Chief Executive Officer Robin Raina in 2009; (2) a 2010 Stock Incentive Plan (the “2010 Plan”), (3) a proxy statement issued before Ebix’s 2010 annual meeting (the “2010 Proxy Statement”) in which Ebix’s board of directors (“Board”) recommended approval of the 2010 Plan, and (4) the proxy statement issued in 2016 that included the 2016 CEO bonus plan (the “2016 Proxy Statement”). Read More