This derivative action was brought by stockholders of Jakks Pacific, Inc. challenging unreasonable defensive measures taken by Jakks’s directors in response to an activist campaign that harmed the company and entrenched the directors.
After defeating a motion to dismiss, Block & Leviton was able to resolve the action through a settlement that resulted in extraordinary corporate governance reforms valued by expert testimony at $20 million to $40 million. Multiple independent analysts commented favorably on the settlement and at least one suggested that news of the deal caused renewed activist interest in the company. On news of that activist interest, JAKKS’ stock rose by 15.6%, reflecting a total increase in market capitalization of approximately $27.9 million.
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