OFI Risk Arbitrages v. Cooper Tire & Rubber Co.
2014 U.S. Dist. LEXIS 108001
D. Del.2014Background
- OFI Risk Arbitrages, OFI Risk Arb Absolu, and Timber Hill filed a securities class action against Cooper Tire and Rubber Company and two executives on Jan 17, 2014 (D.I. 1).
- A PSLRA notice of pendency was published the same day, setting a March 18, 2014 deadline to seek lead-plaintiff status.
- Zhi Sun and Xiaoyan Jia (Sun Family) filed a competing lead-plaintiff motion on March 18, 2014.
- The complaint alleges violations of §§ 10(b), 20(a), and 14(a) in connection with a merger with Apollo Tyres and related misrepresentations about a Chinese subsidiary and the merger’s terms.
- OFI & Timber Hill report combined losses of approximately $513,190.68; the Sun Family reports losses of about $93,089.
- The court grants OFI & Timber Hill lead-plaintiff status and approves their lead-counsel selection; Sun Family’s motion is denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Presumption of most adequate plaintiff under PSLRA | OFI & Timber Hill deserve the presumption | Sun Family contends OFI lacks adequacy/standing | OFI & Timber Hill are presumptively most adequate |
| OFI Asset Management standing to sue for OFI Funds | Sun Family asserts lack of standing | OFI Asset Management lacks standing under Huff-type reasoning | Court finds OFI Asset Management has standing to sue for the OFI Funds |
| Adequacy of Timber Hill as lead plaintiff | Timber Hill is a market maker/day trader not inherently atypical | Timber Hill’s market-making status creates unique defenses | Timber Hill not deemed inadequate; OFI & Timber Hill appointed Lead Plaintiffs |
Key Cases Cited
- In re Cendant Corp. Litig., 264 F.3d 201 (3d Cir. 2001) (presumptive lead plaintiff framework under PSLRA; independent judgment required)
- Huff Asset Mgmt. Co., LLC v. Deloitte & Touche LLP, 549 F.3d 100 (2d Cir. 2008) (standing of foreign asset managers; third-party standing)
- Vivendi Universal, S.A. Sec. Litig., 605 F. Supp. 2d 570 (S.D.N.Y. 2009) (foreign asset managers may have standing to sue on behalf of funds)