The litigation arose from the all-stock acquisition of Rentrak Corporation (“Rentrak”) by comScore, Inc. (“comScore”) that closed on January 2016. Several weeks after the Transaction closed, comScore announced an investigation into accounting issues that caused its stock price to drop significantly.
This class action was filed on behalf of the former shareholders of Rentrak Corporation (“Rentrak”) arising from the sale of Rentrak to comScore in a stock-for-stock transaction. The newly issued comScore shares that Plaintiffs and Class members received were issued pursuant to a registration statement (the “Registration Statement”) that included comScore’s financial statements for 2013, 2014, and the first three quarters of 2015. Plaintiffs allege that Defendant EY certified the 2013 and 2014 results. Several weeks after the transaction closed, comScore announced an internal investigation into accounting issues. comScore subsequently admitted that the financial statements included in the Registration Statement were materially misstated and were required to be restated. Plaintiffs allege that these corrective disclosures caused the comScore shares issued to Plaintiffs and other members of the Class to drop in value.
The litigation against Rentrak and its officers and directors was settled for $19.5 million in May 2017 and the related litigation against Ernst & Young was settled in April 2018 for an additional $4.75 million.
Block & Leviton believes this to be one of (and perhaps the) largest cash settlement(s) in the history of merger-and-acquisition litigation in Oregon. This is also one of the most significant merger litigation settlements in any jurisdiction in recent years. The well-respected economics firm, Cornerstone Research, has published data for all settlements of merger litigation, throughout the country, since 2010. Of the settlements identified by Cornerstone, this is the fourth-largest settlement of any merger litigation arising from a transaction valued at less than $1 billion. And it is the largest settlement of merger litigation arising from a transaction valued at less than $1 billion that did not involve a sale to a controlling stockholder or disproportionate consideration paid to a controlling stockholder.