Foundry Networks Inc. Case 07/23/2008

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Company Name(s): 
Foundry Networks
Case Name: 
Foundry Networks Deal Case 07/23/2008
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: FDRY
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
07/23/2008
Court of Filing: 
Superior Court of the State of California
Summary: 

Santa Clara, Calif.-based Foundry reported to the U.S. Securities and Exchange Commission in a filing that shareholders have filed on July 23rd, 2008, a proposed shareholder class action in the Superior Court of the State of California for the County of Santa Clara against members of Santa Clara, Calif.-based Internet technology provider Foundry Networks Inc.’s board of directors.

The plaintiffs accuse on behalf of the Company’s stockholders that the directors breached their fiduciary duties to the Company’s stockholders in connection with a proposed $3 billion acquisition of the Company by Brocade Communications Systems Inc. and engaged in self-dealing in connection with approval of the Merger, allegedly resulting in an unfair process and unfair price to the Company’s stockholders. Foundry Networks Inc. has a 20 years history and is a specialist in enterprise Ethernet LANs with about 1100 employees. Brocade announced that it was going to buy Foundry Networks for $19.75 in cash and stock or a total of $3 billion dollars, a move if realized may make Brocade Communications the second most powerful vendor of Fibre Channel over Ethernet (FCoE) technology after Cisco. The plan is that the newly combined entity will be headed by Brocade CEO Michael Klayko to be functional under the Brocade brand in order to compete with Cisco in the FCoE market.