Xerox-Fujifilm Deal Blocked By Judge
The deal between Xerox and Fujifilm has been temporarily blocked by a New York judge who says the Xerox CEO was ‘trying to preserve his own job’.
Xerox was planning on selling the majority of itself to Fujifilm.
Xerox shareholder Darwin Deason is suing the company and asking the courts to block the deal saying Xerox failed its shareholders by approving a deal which undervalues the company.
Deason also accused CEO Jeffrey Jacobson of acting without approval trying to make a deal with Fujifilm, preserving his job in spite of shareholders.
New York judge Barry Ostrager granted motions for a preliminary injunction against the deal.
Ostrager told the Supreme Court in Manhattan, “This transaction was largely negotiated by a massively conflicted CEO in breach of his fiduciary duties to further his self-interest and approved by a board, more than half of whom were perpetuating themselves in office for five years without properly supervising Xerox’s conflicted CEO.”
He continues, “[The facts] clearly show that Jacobson, having been told on Nov. 10 that the board was actively seeking a new CEO to replace him, was hopelessly conflicted during his negotiations of a strategic acquisition transaction that would result in a combined entity of which he would be CEO. There is ample evidence that he collaborated with Fuji to make himself indispensable to the transaction.”
The deal was announced in January with the lawsuit was filed early February.