Phase Forward Incorporated Investors File Lawsuit
OCTOBER 2011 - Phase Forward Inc. shareholders lost an appeal of the dismissal of their lawsuit. It was found they failed to adequately claim Phase Forward didn't try to get the highest sale price.
APRIL 2010 - Two angry investors filed a lawsuit in State Court of Massachusetts on behalf of current investors in Phase Forward Incorporated (NASDAQ:PFWD) alleging breaches of fiduciary duty by the Phase Forward board of directors for selling Phase Forward too cheaply to Oracle.
According to the lawsuit the plaintiffs allege breaches of fiduciary duty by the Board of Directors of Phase Forward Inc. (PFWD) in connection with their attempt to sell Phase Forward Incorporated to Oracle Corporation. Phase Forward Incorporated is a provider of an Integrated Clinical Research Suite (ICRS), of enterprise-level software products, services and hosted solutions for use in the customers' global clinical trial and drug safety monitoring activities. On April 16, 2010, Phase Forward Incorporated (NASDAQ: PFWD) announced that it has agreed to be acquired by Oracle Corporation (NASDAQ:ORCL) for $17.00 per PFWD share in cash or a transaction value of approximately $685 million. Shares of Phase Forward Incorporated (PFWD) traded after the takeover announcement at $16.81 per share, and at $13.15 per share before the news. PFWD shares traded at $17 per share as early as November 2009, were down from $21.51 in 2008 and over $24 in 2007, and at least one analyst has set a price target for Phase Forward of $18.00 per share.
Among other things the plaintiffs allege, that the acquisition is designed to unlawfully divest Phase Forward's public stockholders of their holdings without providing them the maximized value. The $24,700,000 termination fee (or $4,000,000 reimbursement fee for Oracle’s out-of-pocket expenses), and the "no solicitation" provision in the agreement unduly binds Phase Forward to the acquisition, so the lawsuit.