Dallas-based law firm Baron & Budd, P.C. files suit to stop sale of EDS to Hewlett-Packard

by PegNews wire

DALLAS — Dallas-based law firm Baron & Budd, P.C. has filed suit on behalf of plaintiff client, the Intermountain Ironworkers Trust Fund (IITF), to stop the sale of Electronic Data Systems (NYSE:EDS) to Hewlett-Packard Corp. (NYSE:HPQ) , alleging that the terms of the sale agreement are unfair to EDS shareholders.

The proposed sale agreement, which has not been approved by EDS shareholders, locks the price for EDS stock at $25 per share, prohibits EDS directors from seeking a higher price from alternative bidders and guarantees Hewlett-Packard a $375 million pay-off if EDS does not go through with the sale. On behalf of all EDS's public shareholders, the IITF plaintiffs allege that, by entering the agreement, EDS directors breached their fiduciary duties to the company's shareholders.

"This deal leaves EDS shareholders out in the cold," said Russell Budd, managing shareholder of Baron & Budd. "They had no say in the transaction, and the company directors who are charged with protecting their interests looked the other way."

This case is not Baron & Budd's first fight to protect shareholder interests in corporate transactions. As co-lead counsel in In re 7-Eleven, Inc. Shareholders Litigation, Baron & Budd successfully increased the tender offer's price per share in the 2005 transaction that transformed the convenience store operator from a publicly traded company to a privately held entity, resulting in a substantial increase in the amount paid to 7-Eleven shareholders.

Baron & Budd attorneys Bruce Steckler and Burton LeBlanc will head up the law firm's efforts on behalf of the plaintiffs, along with co-counsel Randy Pulliam of Cauley, Bowman, Carney & Williams, P.L.L.C. of Little Rock Arkansas. The case is pending in district court in Collin County, Texas.

Source: Baron & Budd, P.C