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M&A Report – Takeaways from Mindbody Stockholder Litigation
Gibson Dunn – In an opinion following a lawsuit brought by former stockholders of Mindbody, Inc. arising out of the 2019 take-private acquisition of Mindbody by Vista Equity Partners, Delaware Chancellor Kathaleen McCormick found the former CEO of Mindbody, Richard Stollmeyer violated his fiduciary duties and that Vista was complicit in that violation. Chancellor McCormick awarded damages equal to $1 per share, plus interest and costs, and held that both Stollmeyer and Vista were jointly and severally liable for the damages. This case provides several lessons for public companies, including government contractors and potential private equity buyers in reinforcing the importance of designing and following fair and open sale processes.