SOURCE: Bernstein Litowitz Berger & Grossmann LLP

August 25, 2010 15:54 ET

City of New Orleans Employees' Retirement System Announces the Approval of a $69 Million Settlement From Xerox Corp. in ACS Shareholder Litigation - Includes Personal Payment of $12.8 Million From ACS Chairman

NEW YORK, NY--(Marketwire - August 25, 2010) -  City of New Orleans Employees' Retirement System ("NOERS"), Court-appointed co-lead plaintiff in the action, today announced that on August 24, 2010, the Court approved a $69 million payment to settle all claims in a shareholder suit relating to Xerox Corporation's ("Xerox") acquisition of Affiliated Computer Services, Inc. ("ACS") (NYSE: ACS). This action was filed in Delaware Chancery Court on behalf of ACS shareholders against members of the Board of Directors of ACS ("the Board"), ACS, Xerox and Boulder Acquisition Corp., a wholly owned subsidiary of Xerox. Bernstein Litowitz Berger & Grossmann LLP represented NOERS, and litigated this action with co-lead counsel for the class.

The complaint alleged that members of the Board breached their fiduciary duties by allowing the Company's founder and Chairman, Darwin Deason, to extract hundreds of millions of dollars through the acquisition at the direct expense of ACS's public shareholders for his high vote Class B shares. The complaint further alleged that Xerox aided and abetted the Board's breaches of fiduciary duties. On the eve of trial, the parties agreed to a settlement, which requires approximately 18% of the $69 million deal to be funded by Deason, who will personally pay $12.8 million to shareholders. 

Speaking on behalf of NOERS' Board of Trustees, Chairman Jerry Davis commented on the shareholder victory, stating: "We're very pleased with the result of our ongoing efforts on behalf of ACS investors. In challenging the actions of both Deason and Xerox, we demonstrated that public companies need to be held accountable when transactions are unfairly structured to favor holders of high vote shares at the expense of the other shareholders." Mr. Davis further commented on the impact of the settlement stating: "This recovery sends a clear message to corporate boards that shareholders will not tolerate the payment of a premium to high vote stockholders at the expense of other investors. The precedents resulting from this case will help to discourage bad corporate governance practices, which result in these types of transactions, in the future."

For more information about this action and the terms of the settlement, please visit our website at www.blbglaw.com

Contact Information

  • Contact:

    Mark Lebovitch, Esq.
    Bernstein Litowitz Berger & Grossmann LLP
    1285 Avenue of the Americas
    New York, NY 10019
    (212) 554-1400
    markl@blbglaw.com

    Tony Gelderman, Esq.
    Bernstein Litowitz Berger & Grossmann LLP
    2727 Prytania Street, Suite 14
    New Orleans, LA 70130
    (504) 899-2339
    tony@blbglaw.com