Kaye Scholer Helps Kenneth Cole Fashion Its Future with $160M Shareholder Litigation Win
Kaye Scholer successfully represented Kenneth Cole Productions Inc. and former CEO Paul Blum in a New York Supreme Court case (In re Kenneth Cole Productions Inc. Shareholder Litigation), brought by minority shareholders, challenging the terms under which the company would be taken private. The judge held that Cole, the company’s controlling shareholder, was under no obligation to cede to the shareholders’ demands that he get a higher price for his company from a third party.
Applying the business judgment rule, the judge agreed with Kaye Scholer and other lawyers for the co-defendants that Cole had taken all appropriate steps in structuring the deal, including his appointment of a four-person special committee and even increasing his initial offer to $160 million. Noting that the deal was reviewed and approved by more than 99 percent of the company’s public shareholders, the judge found that the minority shareholders had failed to prove that obtaining a higher price for the company was even possible.
“Kenneth Cole Productions handled every step of this process legally and beyond fairly,” said Partner Catherine B. Schumacher, who led the litigation team along with Partner Vincent A. Sama and Associate Daphne Morduchowitz. “We are excited for our client and wish the entire team the best of luck in their next phase as a thriving private company.”
Kaye Scholer’s Securities & Derivative Litigation practice represents issuers, investment banks, directors, officers and special committees in state and federal class action securities and derivative cases throughout the US. The team also guides clients through investigations by the SEC, FINRA, DOJ and state attorneys general. Whether it’s an alleged violation of the Securities Act or a breach of fiduciary duties, the firm carefully crafts its strategy to meet client objectives in an efficient and cost-effective manner.