KUEBLER v. VECTREN CORPORATION, 412 F.Supp.3d 1000

In April 2018 Vectren agreed to be acquired by CenterPoint for $72 per share; Vectren filed a definitive proxy statement with the SEC on July 16, 2018 summarizing the deal, BAML’s fairness opinion, and certain management projections.
Shareholders filed a consolidated putative class action alleging the proxy omitted (a) unlevered cash-flow projections for 2018–2027 and (b) separate financial projections for Vectren’s three business segments (gas, electric, non‑regulated).
Plaintiffs claimed those omissions made the proxy misleading in violation of Section 14(a), Rule 14a‑9, and derivative Section 20(a) control‑person liability, and sought damages; the shareholder vote approving the merger occurred on August 28, 2018 and the merger closed in early 2019.
Defendants moved to dismiss under Rule 12(b)(6); the court considered the public proxy statement (but not an expert affidavit attached to the complaint) when ruling.
The court held the omitted projections were not material in context (the proxy contained other projections, a summary of BAML’s analyses, and specific cautionary language) and that plaintiffs failed to plead loss causation; it dismissed all claims with prejudice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Materiality of omitted cash‑flow and segment projections	Omitted projections were critical inputs (cash flow is the key valuation metric) and necessary to evaluate BAML’s DCF and vote	Proxy disclosed other forecasts, BAML’s summary, and cautionary language; only a fair summary of advisor work is required	Omitted figures were immaterial in context; dismissal for failure to plead material omission
Required disclosure of financial‑advisor inputs / ability to replicate DCF	Plaintiffs need the underlying projections to replicate/challenge BAML’s DCF	Proxy provided a fair summary of advisor’s work; defendants need not disclose every input	Court applied fair‑summary principle; full input disclosure not required
Loss causation / economic harm from omissions	Plaintiffs would have rejected the merger or received better value if they had the omitted projections	Alleged future upside is speculative; no definite alternative offer or proximate economic harm alleged	Plaintiffs failed to plausibly allege loss causation; dismissal warranted
Section 20(a) control‑person liability	Directors are liable as control persons if 14(a) claims succeed	20(a) claim depends on underlying 14(a) claim	20(a) claim dismissed because 14(a) claim fails

TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976) (defines materiality standard for disclosure claims)
In re Walgreen Co. Stockholder Litigation, 832 F.3d 718 (7th Cir. 2016) (materiality requires substantial likelihood the omitted fact would assume actual significance)
Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005) (limits pleading of economic loss; price inflation alone is insufficient)
Trahan v. Interactive Intelligence Group, Inc., 308 F. Supp. 3d 977 (S.D. Ind. 2018) (recent district decision on proxy omissions and loss causation in cash‑out merger)
Campbell v. Transgenomic, Inc., 916 F.3d 1121 (8th Cir. 2019) (materiality may be jury question where omitted projections are central and inconsistent with disclosed figures)
Beck v. Dobrowski, 559 F.3d 680 (7th Cir. 2009) (no scienter requirement for Section 14(a) and pleading standards for proxy claims)
Lentell v. Merrill Lynch & Co., Inc., 396 F.3d 161 (2d Cir. 2005) (articulates loss‑causation requirements in securities cases)