New York State Court Issues Decision Blocking Proposed Xerox Business Combination

On April 27, 2018, the New York State Supreme Court issued a significant decision temporarily blocking a proposed business combination between Xerox Corporation (“Xerox”) and Fuji Xerox Co., Ltd. (“Fuji Xerox”), the long-standing joint venture between Xerox and Fujifilm Holdings Corporation (“Fuji”). The crux of the Court’s decision to block the transaction turned on the conduct of Xerox’s “massively conflicted” CEO Jeff Jacobson in negotiating the transaction, and the Board’s “acquiescence” to such conduct. The Court found that upon Jacobson learning that Carl Icahn, the largest shareholder, and the board of directors of Xerox (the “Board”) were seeking to replace him as CEO, he “abandoned the Board’s request to obtain a value-maximizing all-cash transaction and engineered the framework for a one-sided deal” with Fuji that would result in him retaining the CEO position with the combined company. In addition to blocking the transaction, the Court enjoined Xerox from enforcing its nomination deadline for its 2018 annual meeting of shareholders.